Even Mainland Chinese Investors Are Abandoning Hong Kong Stocks

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Some of the most die-hard bulls on Hong Kong shares are deserting as losses intensify.

Chinese investors net sold 869 million yuan ($139 million) of Hong Kong equities via the exchange links with Shanghai and Shenzhen on Wednesday, according to Bloomberg calculations based on daily quota usage. That’s the first net selling by mainland investors since late December and the biggest in any single day since August.

Mainland investors poured a net $2.9 billion into Hong Kong stocks in the first two days of the week, taking net inflows this year to $18 billion. The benchmark Hang Seng Index and the Hang Seng China Enterprises Index still both dropped more than 6 percent over Monday and Tuesday. Their gains on Wednesday morning then also evaporated, as the H-share measure swung the most since November 2016, when Donald Trump was elected as U.S. president.

Chinese buying of Hong Kong stocks could slow considerably and is unlikely to prevent a correction in coming months, Bank of America Corp. strategists including David Cui wrote in a note dated Tuesday.

— With assistance by Amanda Wang, and Sofia Horta e Costa

(An earlier version of this story corrected the spelling of the Hang Seng China Enterprises Index in third paragraph.)
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