Hong Kong stocks advanced in volatile trade after pro-democracy lawmakers voted down the China-backed election plan that spurred protests last year.
The MSCI Hong Kong Index fell as much 0.3 percent within the first 10 minutes of afternoon trading before rebounding to 0.5 percent gain less than 10 minutes later. The measure traded 0.2 percent higher at 2:25 p.m. local time. SJM Holdings Ltd. and Cathay Pacific Holdings Ltd. were among the biggest gainers.
“Voting down the proposal means there won’t be big protests, clearing an overhang for the market,” said Nelson Yan, chief investment officer at Changjiang Securities Holdings (HK) Ltd.
Twenty-eight lawmakers voted against the proposal in the legislature denying Chief Executive Leung Chun-ying the two-thirds majority needed for its passage. Most of the supporters in the 70-member legislature walked out just before the vote in a failed effort to deny a quorum, leaving only eight votes in favor. The rejection means that Hong Kong won’t hold the first-ever direct election of its chief executive in 2017 and leaves in place the current system.
The Hang Seng Index, which includes Chinese companies, declined 0.2 percent.