(Bloomberg) -- Hong Kong’s Hang Seng Index hovered just below the 30,000 point level on Wednesday as mainland traders continued to flood the market with cash.
The benchmark rose as much as 1.2% to 29,984.12 points before paring, falling just 0.05% short of the milestone not seen since May 2019. The rally comes a day after it closed at the highest level in 20 months. The gauge’s best start to a year since 1985 has been fueled by mainland investors shifting into more attractively valued Hong Kong-listed stocks -- net purchasing a record $3.4 billion on Tuesday.
Round numbers matter in Hong Kong as equity-linked products tend to be marketed at key levels. A surge above 30,000 may lead to more gains for the Hang Seng Index should some traders exercise their right to buy the underlying in Hong Kong’s popular derivatives market.
Read: Hong Kong Stocks at 20-Month High as Record China Cash Floods In
As of 11:20 a.m., China traders had net bought $1.5 billion of Hong Kong stocks. Hong Kong Exchanges & Clearing Ltd., the biggest beneficiary of such funds flowing into the city, climbed 2%. Drugmakers CSPC Pharmaceutical Group Ltd. and Sino Biopharmaceutical Ltd. were among the best performers, adding at least 4.4%.
Stocks on the mainland also rose, with the CSI 300 Index adding 0.3% and the tech-heavy ChiNext Index advancing 2.9%.
The southbound daily quota for the two trading links with Shanghai and Shenzhen is 42 billion yuan ($6.5 billion) each.
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