STOCKS fell yesterday morning, but losses were mitigated by a sharply stronger yuan and a surge in gold shares after the market reopened from the week-long Lunar New Year holiday.

    A slump in mainland-listed shares in Hong Kong and a global sell-off last week driven by falling commodity prices and concerns about the impact on European banks, had put investors on edge ahead of the reopening of the mainland’s stock markets.

    But even with disappointing Chinese trade data early in the session, initial losses were pared by the midday break.

    China’s blue-chip CSI300 index was down 1.4 percent, at 2,921.23 points, while the Shanghai Composite Index closed down 0.63 percent, to 2,746.20 points.

    Hong Kong stocks, which sank to 3-1/2 lows Friday, staged a sharp rally, taking cues from a jump in Japan equities yesterday and a Friday rebound in U.S. and European markets.

    The Hang Seng index jumped 2.7 percent, to 18,819.59 points, while the Hong Kong China Enterprises Index surged 4.3 percent, to 7,829.12.

    “Today’s investor sentiment in China’s stock market is damped by last week’s global equity sell-off, but the impact could be temporary,” said Zeng Yan, strategist at Zhongtai Securities Co.

    “The central bank will likely maintain yuan stability in the short term, so yuan depreciation is no longer a major risk the market is facing right now.”

    Most sectors fell yesterday, but gold producers surged as investors bet they would benefit from a flight to safe haven assets such as gold.

    Shandong Gold Mining, Western Region Gold and Zhongjin Gold all jumped by their 10 percent daily limit.

    In Hong Kong, shares rose across the board, with energy and resources shares among the biggest gainers.(SD-Agencies)