Hong Kong shares change course, surge after mainland's rally
Sept 8 (Reuters) - Hong Kong stocks rebounded sharply on Tuesday, as a late-afternoon rally in mainland shares prompted bargain hunting in the city's battered stocks.
The Hang Seng index rose 3.3 percent, to 21,259.04, while the China Enterprises Index, which tracks Chinese companies listed in Hong Kong, jumped 4.1 percent, to 9,479.48 points.
At midday, the Hang Seng was flat, and mainland indexes were down. Then in the afternoon, China indexes began to surge.
"Stock prices have fallen a lot, so the rebound in mainland shares can easily trigger a rally in Hong Kong stocks as well," said Qiu Zhi, Shenzhen-based strategist at Huatai Securities Co.
"Valuation of some stocks are lower than even during the 2008 global financial crisis," he said, adding this attracts bargain hunters.
However, he noted that with trading volume still low, the next few sessions are key in deciding whether there is enough buying to make the rally sustainable.
Alex Wong, a director at Ample Finance Group in Hong Kong, said the index broke though a couple of technical resistance levels, fuelling short covering interest, in particular after Morgan Stanley recommended buying stocks internationally.
"It broke the pattern in the past few days and was able to hover above the level of the previous close, thanks to improved sentiment in the overseas markets following Morgan Stanley's full house buy alert on the global market," Wong said.
Stocks rose across the board. (Reporting by Samuel Shen and Pete Sweeney; Additional reporting by Donny Kwok; Editing by Richard Borsuk)
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