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Monday, October 24, 2016, 16:44

Stocks follow mainland market higher amid yuan

By Reuters

Hong Kong stocks firmed on Monday, led by buoyant mainland markets, but gains were capped by concerns over continued yuan weakness and the possibility of a US rate hike in December.

The Hang Seng index rose 1.0 percent, to 23,604.08, while the China Enterprises Index gained 1.7 percent, to 9,852.90 points.

The mainland's yuan slipped to 6-year lows on Monday morning, but stabilised as large state-owned banks sold dollars in an apparent effort to slow the yuan's decline.

But analysts expect a possible US rate hike in December would strengthen the dollar further, put more pressure on the yuan, and lure liquidity away from emerging markets.

Most sectors in Hong Kong rose, with energy and financial shares among the best performers.

Hong Kong-listed shares in Nanjing Panda Electronics plunged as much as 16.9 percent, after the company said it had scrapped a restructuring plan aimed at improving profitability.

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