Update | Hong Kong, mainland China stocks close higher on rallies in financial, property sectors after early losses

Hong Kong and mainland Chinese stocks closed higher on Wednesday amid strong rallies in the financial and property sectors despite news that China’s foreign exchange reserves fell to a nearly six-year low, which had hit market sentiment during morning trading.

The Hang Seng Index gained 0.66 per cent, or 153.56 points, to close at 23,485.13 after falling to 23,310.29 during morning trading, ending the day at a three and a half month high, while the Hang Seng China Enterprises index also bucked the downward trend from morning session to close 1.11 per cent higher at 9,955.34.

Rising capital inflows was a bright spot on the Hong Kong bourse as the Shanghai-Hong Kong Stock Connect saw more than 14 per cent of its daily southbound quota used on Wednesday.

“It is a special day for the two markets,” said Kingston Lin King-ham, director at securities brokerage AMTD. “The indices totally reversed the downward trend during morning trading and started rising even when there was no exciting market news.”

He expects Hong Kong stocks to maintain their rising trend for the next two days while mainland Chinese stocks should be stable, adding that it’s possible the Hang Seng index could pass the key 23,500 threshold as more mainland funding continued to flow into the Hong Kong market.