Update | Hong Kong shares shine by midsession on fund flows, Chinese stocks ease

Hong Kong’s bourse outshone Chinese stocks by midday on Wednesday morning, as foreign funds flowed in while investors cut their positions on mainland stocks.

The Hang Seng Index rose 0.74 per cent or 203.99 points to 26,670.71 points by the midday break on Wednesday although the Hang Seng H-shares Index, where mainland Chinese share hold more sway, fell 0.54 per cent or 76.93 points to 14,124.7 points.

The Shanghai Composite Index and Shenzhen Composite Index fell 1.02 per cent to 4,860.58 points and 0.92 per cent to 3,002.16 points respectively by midsession.

Part of the reason for the Hang Seng Index’s rise was the flow of overseas funds into the Hong Kong market to buy shares such as property counters, said Louis Tse, a director of VC Brokerage.

One property stock that did well was Cheung Kong Property Holdings, the property arm of Hong Kong’s richest man Li Ka-shing. On its first day of trading, Cheung Kong Property rose 6.21 per cent to HK$74.35 by Wednesday noon, with 45.95 million shares traded.

The Hong Kong stock market also drew inspiration from news that US Federal Reserve board member Lael Brainard said it may be impossible to raise US interest rates until the global economy improves in the strongest indication yet that the first rate increase by the Fed since 2006 will be delayed almost until year end or even later.

Hong Kong interest rates are tied to US interest rates, and a rise in US interest rates is expected to hurt sentiment in the market while a delay would likely boost Hong Kong market sentiment.