Hong Kong stocks end grim week on up note as risks linger

The Hang Seng Index ended its worst week in more than six months yesterday, with pro-democracy protests overshadowing a surprise rally in the afternoon session in which traders picked up beaten-down shares.

The market benchmark had fallen more than 10 per cent last month, a move that accelerated after student-led protests broke out at key locations across the city at the weekend. Two days of public holidays put a brake on the slide, with yesterday's session the first trading day of October.

Mark Konyn, the chief executive of Cathay Conning Asset Management, said he was targeting stocks that had seen valuations bashed but retained good earnings prospects.

"We came into September holding slightly more cash in response to developments globally. The plan has been to redeploy this cash where we see opportunities based on valuations driven by the prospect for earnings. Hong Kong has been targeted for some of this redeployment," he told the South China Morning Post.

Buyers like Konyn helped the Hang Seng Index reverse morning losses to end the day 0.57 per cent higher at 23,064.56 points, but that was not enough to erase the benchmark's 2.59 per cent fall this week, the heaviest weekly decline since March 14.

Risk is lingering over the city's financial markets as protesters remain on the streets of Central, Causeway Bay and Mong Kok ahead of promised talks expected in coming days between student leaders and Chief Secretary Carrie Lam Cheng Yuet-ngor.