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Tuesday, September 27, 2016, 16:33

Shares rise over 1%, aided by mainland money inflows

By Reuters

Hong Kong shares rose more than 1 percent on Tuesday, recovering much of Monday's drop and aided by further money inflows from Chinese mainland investors.

But investors were bracing for a drop in flows from Mainland China as the Shanghai-Hong Kong Stock Connect scheme will be suspended from Sept 29 to Oct 10 due to Mainland China's National Day holiday.

The Hang Seng index rose 1.1 percent to 23,571.90 points, while the China Enterprises Index gained 1.2 percent to 9,746.56.

Nearly all sectors rose, with financial shares leading the gains.

Chinese mainland investors bought 3.6 billion yuan (US$539.90 million)of Hong Kong stocks on Tuesday via the Shanghai-Hong Kong Connect, sustaining the recent trend of strong southbound flows.

But the suspension of the cross-border scheme which starts on Thursday might have an impact on the market's liquidity, as "Chinese mainland money inflows has been an important factor behind the strong rally recently," said Linus Yip, strategist at First Shanghai Securities Ltd.

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