Hong Kong stocks lead the global rally, and whether the Chinese stock market can continue its momentum is uncertain.

The surge in the Chinese stock market has attracted global attention, but it has not convinced some major financial institutions worldwide.

Fund managers and strategists from Invesco, JP Morgan Chase Asset Management, HSBC Global Private Banking and Wealth Management, and Nomura Holdings, among other institutions, expressed doubts about this rebound, fearing that many stocks may have been overvalued before the Chinese government fulfills its stimulus promises with real money and silver.

Since late September, with a series of economic, financial, and market support measures boosting investor confidence, stocks in the world's second-largest economy have risen sharply. The Hang Seng China Enterprises Index has risen over 30% since early September, outperforming over 90 global equity indices tracked by Bloomberg.

Marvin Leung, Chief Investment Officer for JPMorgan Chase in Hong Kong and China, said that short-term market sentiment may be overly buoyant, but people will eventually return to fundamentals.

"Due to this rebound, some stocks have become overvalued and these stocks lack a clear value proposition based on their potential profit performance."

Over the past month, the Chinese government has announced a series of stimulus measures, including interest rate cuts, reserve requirement ratio cuts, providing substantial liquidity support to the stock market, and pledging to curb the downward trend in the real estate market.

This Tuesday, the National Development and Reform Commission of China will also hold a press conference on incremental policies, introducing the 'systematically implementing a package of incremental policies' and other related information.

Although there are many optimistic factors supporting the continuous rise of the stock market, false dawns have appeared many times before, the latest being the rebound in February, which later completely dissipated.

The recent soaring of Chinese stocks has re-established its influence on more extensive emerging market indices, with fund managers holding relatively low positions in this largest developing country showing poor performance.

The sustainability of the rebound will not only affect the annual performance of index funds but also have a direct impact on countries that have trade and investment exchanges with China.

Initially one of the few relatively bullish investors in the Chinese market at the beginning of the year, Ma Lei now states that he is not in a hurry to increase his investments.

"The prices of some stocks have risen by 30% to 40%, almost reaching historical highs."

"In the next 12 months, whether the fundamentals can reach the level before the peak is more uncertain to me. Therefore, we will reduce holdings of those stocks with overly high valuations."

J.P. Morgan Asset Management also maintains a cautious attitude.

Xu Changtai, Chief Asia Market Strategist at J.P. Morgan Asset Management, stated that China needs to take more policy measures to boost economic activity and confidence. Policies announced so far have helped smoothen the deleveraging process but there is still a need to repair the balance sheet.

Xu Changtai also pointed out that uncertainties in external markets may dampen the gradual formation of the current uptrend in the Chinese stock market.

With only one month left until the U.S. election, many investors believe that the U.S. considering China as an economic and geopolitical rival is a consensus between the two parties.

"Currently, foreign investors may choose to wait for economic data to bottom out and for new policies to stabilize."

HSBC Private Banking still has concerns that the measures taken by China may not be enough to reverse the country's long-term economic growth slowdown trend.

"To maintain the economic recovery momentum and support growth, and achieve a target of around 5% GDP growth in 2024, a more aggressive fiscal stimulus policy needs to be implemented."

Van Chok-Wan, Chief Investment Officer for Private Banking and Wealth Management in Asia, stated that the expected GDP growth rate for China is forecasted to slow down from 4.9% in 2024 to 4.5% in 2025. Based on this expectation, the bank holds a neutral stance on Mainland China and Hong Kong stocks.

Xin Qi, M&G Mingzhou Investment Management's Asia Fixed Income Fund Manager, believes that without significant liquidity risks, the Chinese government is expected to announce a fiscal stimulus plan by the end of October, which could lead to a more stable market environment at that time.

This plan may prompt investors to reassess the impact of stimulus policies on the economy in the next 1 to 2 quarters.

With the transformation of China's fiscal policy, targeted measures are expected to be taken in the fourth quarter to support credit growth and increased household consumption.

However, some optimists also believe that due to the large-scale sell-offs in the past three years, Chinese stock valuations remain relatively low.

Matthew Quaife, Head of Global Multi-Asset Investments at Fidelity International, stated that the current rebound momentum can continue, with a substantial amount of funds still needing rebalancing, especially from global investors.

"We know that the valuation is still below average, from a technical perspective, the valuation may further rise."

However, Nomura Holdings' attitude is more pessimistic, warning that this round of stock market rally may quickly turn from prosperity to depression.

Nomura economists led by Lu Ting wrote in a report to clients that in the worst-case scenario, a collapse might happen after the stock market frenzy, similar to what occurred in 2015.

They indicate that the probability of this outcome is likely 'much higher' than some more optimistic scenarios.

Just as investors and strategists are cautious about putting more funds into the Chinese stock market, they are also carefully considering what the stimulus measures will ultimately mean for government bonds and currency.

Since the stock market rally began, Chinese government bonds have experienced a decline. Prior to this, due to investors purchasing safe-haven assets, government bond yields had consecutively hit historic lows.

ING Bank's Chief Economist for Greater China, Song Lin, stated that there are still some significant challenges to be addressed, and this is not an easy road.

We need to ensure that policy stimulus can effectively contain the declining trend of the real estate market, rather than just leading to hot money flowing into the stock market.

He indicated that if the stock market cools down, bonds may become beneficiaries.

If any issues arise in the next steps, we face the risk of returning to the environment of the previous few months.

Renminbi traders on Tuesday will focus on the central bank's midpoint fix. The onshore renminbi has appreciated by over 1% in the past month, approaching the key level of 7 yuan, breaking this barrier may trigger further gains.