HONG KONG, July 7 (Reuters) - Hong Kong stocks rose on Thursday as hope for stimulus moves in China to support the struggling economy fuelled buying, offsetting fear of further weakness in the yuan and worry about Europe.
Investors took a breather as the Chinese yuan pulled away from 5-1/2 year lows against the dollar, while expectations for looser monetary policy, more reforms and the anticipated launch of Shenzhen-Hong Kong stock connect aided buying.
The Hang Seng index rose 1.0 percent to 20,706.92. The China Enterprises Index climbed 1.2 percent to 8,600.99.
Since the Brexit vote, the yuan has fallen about 1.6 percent to 5-1/2 year lows. Though the currency steadied on Thursday, most analysts and traders believe the central bank will allow it to drift further to support struggling exporters.
Shares of energy stocks led Thursday's advances, with China Shenhua surging 3.7 percent, PetroChina gaining 2.3 percent and Sinopec Corp up 1.9 percent. (Reporting by Michelle Chen and Donny Kwok; Editing by Richard Borsuk)