Update | Stocks in Hong Kong, mainland advance as Bond Connect opens for business

Shares in Hong Kong and mainland China climbed in Monday’s morning session as global investors began buying China’s bonds through the new Bond Connect programme.

But concerns remained over global political uncertainties and a further decline in technology shares.

The Hang Seng Index gained 24.36 points, or by 0.09 per cent, to 25,788, while the Hang Seng China Enterprises Index increased 37.21, or by 0.36 per cent, to 10,402. In mainland exchanges, the CSI 300 Index dropped 13.37, or 0.37 per cent, to 3,653.43, while gains were recorded on both the Shanghai and Shenzhen bourses.

“I think the global markets are in for a breather near term. There’s too much uncertainty in the US right now and tech stocks will drop from these levels and pull the rest of the market with them,” said Brett McGonegal, the chairman and chief executive of Capital Link Investment Holdings. “This will be negative near term for all markets but will offer a geographic shift in equity allocation away from the US into china.”

The Bond Connect programme, which allows Hong Kong investors to trade in China’s fixed income markets, kicked off this morning with more than 3 billion yuan worth of mainland Chinese debt purchased by international investors at the start of trade.

“The Bond Connect is an extremely important event as it shows the regulators are continuing to deliver on their promises and open up the Chinese market,” said McGonegal. “This will be looked back on as a day that helped take China to the next level and begin to build the debt market mechanism that will increase liquidity and push the renminbi’s globalisation further on the way to its objective of becoming a base currency.”

HSBC and an asset management unit of Bank of China said they have completed their first trades using the scheme. HSBC gained 1.7 per cent to HK$73.90 in the morning session while most bank shares retreated after gains in previous sessions.