Hong Kong's benchmark stock index rose for the third straight day on Wednesday to a two-year closing high, bolstered by China fund flows and investors' bargain hunting for blue chips. The market was firm even as Hong Kong's second board for start-ups fell to another record low and as investors braced for a possible hawkish policy stance ahead of the Bank of Canada's upcoming policy meeting and Yellen's testimony to Congress.
The Hang Seng index rose 0.6 percent, to 26,043.64, while the China Enterprises Index gained 1.0 percent, to 10,517.37 points. On Wednesday, Chinese investors used 22 percent of the daily quota to buy Hong Kong stocks via the Shanghai-Hong Kong Connect, as net inflows from the mainland has gradually increased over the past month. Chinese money was behind the surge in Sunac China, whose shares touched a record high on Wednesday, on the back of news the developer plans to buy Dalian Wanda's tourism projects for $9.3 billion.
Financial shares were firm, with Industrial and Commercial Bank of China (ICBC) jumping 3.4 percent. Hong Kong's second board, the Growth Enterprise Market continued to slide, falling 0.5 percent to a fresh record low.