The Hang Seng Index closed 0.3 per cent higher at 26,220.3 on Thursday, boosted by a Hong Kong government plan to ban face masks at public gatherings.
The city's stock market opened lower in the morning, weighed down by local property developers energy companies, but towards the afternoon, it was lifted by a rebound in MTR shares, mainland Chinese health care and consumer stocks, as well as the Macau casinos.
Trains operator MTR gained 2.3 per cent following the news of the face mask ban, and closed at HK$44.5. The protests-hit company wiped out all the losses it made in the morning. At one point on Thursday it was trading at HK$42.75, its lowest level since late February.
Alex Au, managing director at Alphalex Capital Management, said the proposed ban on masks during public gatherings could have a positive effect on the local markets.
"It sounds useful to some extent ... police might be able to arrest people even before they start destroying things," he said. "At least, this might squeeze out the short sellers," he added.
Kevin Leung, executive director of investment strategy at Hong Kong-based brokerage Haitong International, however, sounded more cautious and said the impact of a face mask ban " if passed " would be "neutral".
"A big question would be " how are they going to enforce [the ban]?," he asked, noting that confrontations between protesters and police were already intense.
He also said disappointing economic data from the United States would have less of an impact on H shares, compared with the broad declines on US bourses, given that the valuations of H shares were already "cheap and reasonable".
"The downward adjustment of H shares will be less volatile," Leung said, noting that the Hang Seng Index was likely to move roughly between about 25,000 and 27,000.
The Macau casinos were major winners on Thursday. The city's tourism bureau announced visitors to Macau had increased by 9.6 per cent year on year during the first two days of "golden week". Galaxy Entertainment closed 2.7 per cent higher at HK$50 and Sands China gained 1.8 per cent to HK$36.3.
China food delivery platform Meituan Dianping reached its highest level since an IPO last September, with its stock closing 1.1 per cent higher at HK$82.4. Bloomberg Intelligence said Meituan was benefiting from rising operating efficiency in the food delivery segment, and narrowing losses related to new initiatives.
Oil companies and local developers were among the big losers. State-owned oil company CNOOC shed 1 per cent to close at HK$11.7. Japanese investment bank Daiwa downgraded the company from buy to hold in the morning, because it expects a prolonged weakness in oil prices.
Hong Kong property giant Wharf REIC lost 0.9 per cent to close at HK$43.4 and Hung Lung Properties eased 0.8 per cent to close at HK$17.9.
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Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.