Hong Kong shares follow mainland market higher on policy hopes
HONG KONG, March 16 (Reuters) - Hong Kong shares rose on Monday in step with strong gains in mainland markets on expectation that China will loosen policy to bolster its slowing economy, but analysts say the strenthening U.S. dollar is having a negative effect on Hong Kong stocks.
Premier Li Keqiang said on Sunday that Beijing had plenty of scope to adjust policies in order to boost the world's second-largest economy, boosting mainland stocks by more than 2 percent to their highest level in five and a half years.
Financial stocks led gains in Hong Kong's benchmark index, but the market's rise was curbed by worries that a stronger dollar will attract money away from the city's bourse.
"The reaction in Hong Kong to the premier's remarks is much more subdued, as the main theme here is the strengthening U.S. dollar," said Chen Zhizhong, Shenzhen-based analyst at China Merchant Securities.
He added that if global investors allocate more money to the United States, that would put pressure on Hong Kong shares.
The Hang Seng index rose 0.5 percent, to 23,949.55, while the China Enterprises Index gained 0.9 percent, to 11,813.78 points.
Among the most actively traded stocks on Hong Kong's main board were China National Culture Group, up 30.6 percent to HK$0.16; Global Tech, up 48.1 percent to HK$0.11 and Universe International Holdings, up 36.1 percent to HK$0.08.
Total trading volume of companies included in the HSI index was 1.2 billion shares. (Samuel Shen and Kazunori Takada; Editing by Jacqueline Wong)
© Thomson Reuters 2017 All rights reserved.