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Hong Kong: Shares close up on China rally

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[HONG KONG] Hong Kong shares rose on Tuesday, supported by a massive rally in mainland China indexes led by financial services stocks.

Analysts attributed the rally to rumours that insitutional money had begun moving into bank and brokerage shares, and to related speculation that the central bank is preparing to reduce bank reserve requirement ratios sooner than expected.

The Hang Seng index rose 1.2 per cent to 23,654.30 points, while the China Enterprises Index gained 2.8 per cent to 11,125.79 points.

Chinese investment flowing from Shanghai into Hong Kong through the mutual market access pilot programme took up only 0.3 billion yuan of the 10.5 billion yuan (US$1.7 billion) daily quota.

The index measuring price differences between dual-listed companies in Shanghai and Hong Kong rose 2 per cent to 111.94, the highest level since July 2013, as the two markets take increasingly different views of valuations.

REUTERS