The Hong Kong stock market rose on Wednesday led by the gains of mainland financial and energy companies, showing improved investor sentiment after the wild swings triggered by sharp market falls in the United States earlier this month.

The Hang Seng Index gained 1.8 percent while the Hang Seng China Enterprises Index, which tracks large-cap mainland companies, rose 2.3 percent. Agricultural Bank of China surged 4.2 percent and China Petroleum & Chemical Corp was up 3.7 percent at the close.

The rally of the Hong Kong market as well as the Japanese and South Korean equities on Wednesday indicated an improved investor mood in Asia after the sharp corrections of US equities prompted substantial global selling.

Investors are closely watching how the Shanghai and Shenzhen markets on the Chinese mainland will perform in the first trading day of the Year of the Dog as the mainland markets will resume trading on Thursday after the week-long Lunar New Year holiday.

The benchmark Shanghai Composite Index edged higher in the last trading before the holiday and the index has rebounded 2 percent from the recent low.

Fund managers and stock strategists have expressed positive views on the long-term prospects of the mainland market, which will be supported by improved corporate earnings and the resilient growth led by new technology and strong domestic consumption.

"We believe that China remains attractively valued relative to its strong growth prospects, and parts of the market remain under-researched. We favor high growth domestic consumption-related names, while looking to avoid sectors with structural excess capacity," Jason Yu, head of multi-asset product for North Asia at asset management company Schroders Plc, said in a research note.

Yu noted that the US market has become more expensive and investors are expected to increasingly consider global opportunities, particularly in emerging markets, given the structural positive growth prospects and benign fundamentals.

The US Dow Jones Industrial Average has recovered by 4.6 percent from the recent low. The index fell 1 percent on Tuesday snapping a six-day winning streak while the S&P 500 Index also pulled back by 0.6 percent.