JUNE 4 (Reuters) - Hong Kong's benchmark Hang Seng Index erased most of the losses it suffered during an early afternoon sell-off, mirroring the dramatic reversal mainland stock markets saw on Thursday.
The Hang Seng index ended 0.4 percent lower, at 27,551.89, while the China Enterprises Index gained 0.1 percent, to 14,127.01 points.
At one point, both indexes were down more than 2 percent.
Most sectors ended the day lower, but financial shares were firmer, led by listed mainland lenders.
Analysts attributed the rise to expectations that Beijing would soon allow state lenders to give a greater role to private investors.
Bank of Communications jumped 4.5 percent amid talk its shareholder-restructuring proposal could be approved within weeks. The lender issued a statement at midday saying there is no significant progress that requires disclosure.
Shares of Shenzhen-listed BYD Co Ltd, the electric carmaker backed by Warren Buffett, jumped over 8 percent in Hong Kong after it proposed raising over 15 billion yuan through fresh share sales in China. (Reporting by Samuel Shen and Nathaniel Taplin in Shanghai; Editing by Richard Borsuk)