HONG KONG, Sept 15 (Reuters) - Hong Kong stocks posted modest gains on Thursday, outperforming broader regional markets, as investors hunted for bargains after selling earlier in the week, but turnover was light as Chinese markets were closed for a long holiday.
Financials and utilities helped push the Hang Seng index up 0.6 percent to 23,322.84 points by the lunch break. The financial subindex rose more than 1 percent at one point.
The Hong Kong China Enterprises Index rose 0.5 percent to 9,591.30.
Rising purchases from mainland investors, particularly aimed at financials, have lifted bank shares in recent days.
Wenjie Lu, an H-share strategist at UBS, estimates participation of onshore investors via the Shanghai-Hong Kong stock connect program now account for more than a tenth of the Hong Kong stock market’s turnover.
The market slumped more than 3 percent on Monday, its biggest single-day fall in seven months, on fears the U.S. Federal Reserve would raise rates as early as next week.
Chinese markets are closed for holidays and will reopen on Monday. Hong Kong will be closed for a holiday on Friday.
As a result, turnover was extremely light.
In terms of valuations, Hong Kong is still relatively cheap compared with its regional peers, with a price-to-earnings of 11.4 times, roughly one standard deviation below its 20-year average, though a large part of it is skewed by the Chinese banks.
Casino stocks outperformed, with Galaxy Entertainment and Sands China up more than 3 percent.
Vitaly Umansky, an analyst at Bernstein in Hong Kong, said casino revenues so far in September were stronger than expected.
Market volumes have been on a steady spiral downwards after topping nearly 120 billion Hong Kong dollars ($15.47 billion)last Friday, which was the highest in a year.
$1 = 7.7582 Hong Kong dollars Reporting by Saikat Chatterjee; Additional reporting by Farah Master; Editing by Kim Coghill