November 6, 2017 / 8:47 AM / 9 months ago

Hong Kong stocks pare losses on Chinese bargain hunting

Nov 6 (Reuters) - Hong Kong stocks pared sharp losses on Monday, as mainland investors sought bargains in blue chips such as Tencent Holdings and China Construction Bank .

The benchmark Hang Seng index tumbled as much as 1.6 percent in the morning session, but recouped most of its losses by market close, ending at 28,596.80 points. The China Enterprises Index lost 0.7 percent, to 11,524.64 points, also recovering from its earlier tumble.

The morning’s weakness was the result of profit-taking triggered by negative news flows over the weekend - including a corruption crackdown in Saudi Arabia and a call for tougher regulation in China, traders said.

But fresh money from China took advantage of the correction to buy battered stocks.

The cross-border Shanghai-Hong Kong Connect scheme saw 2.6 billion yuan ($391.92 million) in net flows into Hong Kong stocks, over four times the amount during the previous session.

IT stocks led the rebound with a 2.5 percent gain, as Chinese tech giant Tencent, a favourite among mainland investors, rose 2.5 percent.

Energy shares were also strong, rising nearly 1 percent on the back of higher oil prices. ($1 = 6.6340 Chinese yuan) (Reporting by the Samuel Shen and John Ruwitch; Editing by Jacqueline Wong)

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