Hong Kong stocks slip, but mainland rally checks losses

Hong Kong stocks fell on Monday but recouped much of their losses, helped by robust gains on the mainland as Beijing signalled support for its market.

At the close of trade, the Hang Seng index was down 31.18 points, or 0.12pc, at 25,057.99 after falling as much as 1.3pc, while the Hang Seng China Enterprises index, which tracks mainland firms listed in Hong Kong, added 0.9pc to 10,295.32.

The top gainer on the Hang Seng was China Life Insurance Co Ltd, which gained 8.32pc, while the biggest loser was Wharf Real Estate Investment Company Ltd, which fell 5.86pc.

Leading the gains, Hang Seng materials index jumped 4.7pc, while properties and construction index ended 1.9pc higher.

China stocks rose 3pc on Monday, led by financial firms, after regulators moved to bolster the market by lifting equity investment cap for insurers and encouraging mergers and acquisitions among brokerages and mutual fund houses.

Mainland investors purchased a net 6 billion yuan ($858.42 million) worth of Hong Kong shares on Monday via the Stock Connect linking the island and mainland, according to Refinitiv data.

Britain will suspend its extradition treaty with Hong Kong on Monday in an escalation of its dispute with China over its introduction of a national security law for the former British colony, newspapers reported.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.17pc, while Japan's Nikkei index closed 0.09pc higher.

The yuan was quoted at 6.9904 per US dollar at 07:49 GMT, 0.02pc firmer than the previous close of 6.9915.

At close, China's A-shares were trading at a premium of 33.55pc over Hong Kong-listed H-shares.