Hong Kong’s Stock Rally Faces Test With China Inflows on Pause

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The flags of the Hong Kong Special Administrative Region, left, China, second left, and the Hong Kong Exchanges and Clearing Ltd., second right, in Hong Kong on Feb. 29. Photo: Bloomberg

(Bloomberg) — One of the chief buying forces behind Hong Kong’s world-beating rally is out of action for the next few days, likely leaving the market without a crucial pillar of support.

Mainland Chinese investors have become increasingly important for Hong Kong’s stocks, where the Hang Seng Index sits on the cusp of a technical bull market. Purchases by funds across the border are frequently responsible for some of the biggest single-stock moves. And they’ve just gone on a three-day hiatus, with trading links closed due to the Labor Day holiday that started on Wednesday.