Update | Markets steam ahead as date set for Hong Kong-Shanghai cross-border share trading

Share prices rallied yesterday after regulators in Shanghai and Hong Kong confirmed that the widely anticipated 550 billion yuan (HK$700 billion) scheme to directly link stock trading in the two cities would start next Monday.

A joint statement by the Hong Kong Securities and Futures Commission and the China Securities Regulatory Commission said that all rules had been agreed for trading and clearing as well as the terms for dealing with cross-border market misconduct.

The news sent the Hang Seng Index to a one-month high of 24,110.24 before it settled to end the day up 0.8 per cent at 23,744.70. The Shanghai Composite Index jumped 2.3 per cent to close at 2,473.67 - its highest since November 2011. It also helped lift the 45-country MSCI All World Index, a benchmark for international fund managers, to its highest since late September.

Market anticipation over the start date of the "through train" scheme had intensified in recent weeks, sparking a scramble among Hong Kong banks to secure sufficient yuan to meet anticipated demand for Shanghai-related trades.

The timing, however, caught some market participants in the city by surprise as they had expected a longer gap between the announcement and the beginning of trade.

"Initially, we were told there would be a two-week notice. Now it is literally starting in five trading days," said Stephen Sheung, head of investment strategy at Sun Hung Kai Investment Services.

The so-called through train had been expected to begin operations late last month, although a formal start date was never announced.