Hong Kong stocks rebounded 206.56 points, or 1.61 percent, to close at 13,005.08 on Wednesday, regaining the key 13,000 mark as investors were encouraged by Wall Street's strong performance overnight.

The benchmark Hang Seng Index bounced 181.34 points, or 1.42 percent, to open at 12,979.86 and once jumped 349.79 points, or 2.73 percent, to the day's highest 13,148.31.

The market narrowed its gains in the morning session and fluctuated after Hong Kong financial secretary John Tsang predicted in the Budget that the city's economy would likely contract 2-3 percent in 2009.

Turnover rose to HK$37.28 billion ($4.81 billion) from Tuesday's HK$36.97 billion.