Citibank reiterated its target of 26,800 points for the Hang Seng Index at the end of the year, with a forecast to rise to 27,500 points by mid-next year.
The bank giant said the market is expected to reverse recent gains in the short term, while strong companies' earnings will support a rebound afterward.
Technology and internet shares will benefit from the mainland's emphasis on new quality productive forces in the 15th Five-Year Plan, it added.
Elsewhere, the lender believed the city's commercial property market had bottomed out, driven by improved retail market, rising rents and lower interest rates.
Regarding residential properties, Citibank said the home prices will remain flat this year, adding that the price hike depends on the supply and demand balance.
The number of transaction units will surpass that of completed units in 2027, while luxury projects will lead in the market due to the easing requirements for the investor visa scheme, the bank said.
