A recovery in Hong Kong's stock market yesterday may be a classic dead-cat bounce, with investor sentiment clearly risk averse despite a fresh flurry of edicts from mainland regulators designed to soothe investor fears of an unstoppable slide in the country's stock markets. While the market-calming measures had the desired effect, they masked the narrow nature of the day's rebound. Data for Hong Kong's benchmark Hang Seng Index showed buying and selling volume to be almost evenly matched. Buyers outpaced sellers by a mere 9 per cent, though that was enough on the day to hoist the index 3.73 per cent, or 876.23 points higher, largely as a consequence of purchases in select blue chips. "Unfortunately, with bounces like today, this emotional and high-volume trading capitulation doesn't come to fruition. Then add to the mix the fact that half the stocks in China are halted and this bottom becomes harder to achieve," said Brett McGonegal, chief executive of Reorient Group, a Hong Kong-listed investment firm. "We were almost at the bottom and bounces like today prolong the timeframe to get that bottom in place." Few investors cheered news of another of 194 companies halting their shares from trading on the mainland. A total of 1,439 stocks, about half the number of listed companies in Shanghai and Shenzhen, are now suspended from trade. "The sell-off in blue-chip companies was a by-product of so many stocks being halted in the mainland," McGonegal said, explaining the core reason for the plunge in the Hang Seng Index on Wednesday, as fund managers were forced to dump other holdings when they could not sell on the mainland. The Hang Seng Index's biggest one-day gain in three months also came with declining turnover, which fell to HK$212.71 billion yesterday, from Wednesday's HK$238.99 billion. "Volatility has increased and the latest actions risk longer-term implications as stock becomes tied up and investors lose confidence due to the share suspensions," said Mark Konyn, chief executive of Cathay Conning Asset Management. A principal driver of the bounce in the Hong Kong benchmark was technology giant Tencent. Its outsized 8.31 per cent rally to HK$146 was delivered on marginal net buying, suggesting no clear incentive for investors to begin bargain hunting for beaten down blue chips. Trading activity in Bank of China, China Construction Bank, Bank of Communications and China Petroleum and Chemical Corp also pointed in the same direction - all were in the top 10 most actively traded shares in Hong Kong and all were fallers. H shares are trading at a 42 per cent average discount to A shares for dually listed firms, according to equity strategists at Citi. Almost all 88 dually listed firms in Hong Kong are now trading at a discount to their Shanghai counterparts, with Fuyao Glass being the exception, rising 1.22 per cent in Hong Kong yesterday. Nearly half of these companies, including large-cap PetroChina, Air China, China Citic and Bank Corp are trading at a 50 per cent discount. Hong Kong Exchanges and Clearing, operator of the city's stock market, saw its shares soar 15 per cent, making it the day's best performer among the 50-member Hang Seng Index. The H-share Index, which tracks Hong Kong-listed mainland companies, rose 3.05 per cent to 11,446.37, driven by a 17.5 per cent increase in the stock price of Citic Securities, which announced a HK$1 billion share buyback programme. The Hang Seng Index has now dropped 15 per cent from its 52-week high in April, while the H-share index has lost 24 per cent from its May peak.