Tencent Holdings Ltd. and Alibaba Group Holding Ltd. were among the best performers, advancing at least 7% each. The sector’s gains tracked an advance overnight of Chinese stocks listed in U.S. exchanges.

Investors are weighing cheap valuations for Hong Kong and Chinese equities against lingering regulatory risks for tech firms, including a possible U.S. delisting of Chinese stocks. Clouding the prospect of a sustained market turnaround are concerns related to Beijing’s ties with Russia and a lockdown in China’s tech hub Shenzhen.

“It looks more like a rebound than a bottom as we are not seeing any big inflows,” said Steven Leung, an executive director at UOB Kay Hian Hong Kong Ltd. He added that while markets have been oversold, any upside will be limited given the earnings outlook is dim.

Wednesday’s advance follows a historic selloff in the region this week, with the Hang Seng China Enterprises Index, a gauge of Chinese firms listed in Hong Kong, plunging by the most since the global financial crisis on Monday.

Even with the latest bounce, some market watchers say it’s too early to call an end to the rout. JPMorgan Chase & Co. earlier this week labeled some Chinese internet names as “uninvestable” in the short term.

Meanwhile, short sell turnover in Hong Kong shares accounted for more than 20% of total equity trading on Monday, the highest since late January, according to data compiled by Bloomberg.

“Given that the Hang Seng’s recent plunge is one of the worst in over five decades, we believe such high short volume suggests market capitulation, rather than an omen of what looms,” said Hao Hong, chief strategist at Bocom International Holdings. “Such intense short volume can be the fuel for violent market rebound, but will also take some time to dissipate given its sheer volume. At this juncture, patience is a virtue.”

On the mainland, the rally was more subdued, even after state media have tried to talk up sentiment in recent days. China’s CSI 300 Index edged 0.2% higher as of 10:40 a.m. local time, paring an earlier gain of as much as 1.9%. A Securities Daily report said on Wednesday that A shares may rebound in the future due to various positive factors, citing five analysts.

“Sentiment is still extremely weak and the rebound today is quite feeble compared to the jump overnight, showing the lack of confidence,” said Zhang Fushen, senior analyst at Shanghai PD Fortune Asset Management. “None of the chief negative factors have been alleviated, hence there’s no reason to expect a turnaround, or even a rally that can last for days. Gains right now are just an excuse to sell.”