Hong Kong’s markets have long been where east, or at least China, has met west and from where companies called Trillion Trophy Asia or Sparkle Roll, which may sound unconventional to western ears, bid for the likes of Birmingham City Football Club or Bang & Olufsen. The city also represents the best way of gaining broad exposure to China without facing the extreme peaks and troughs of mainland markets driven by retail investors. Or at least it did, until its main China index last week started diverging sharply from Shanghai and Shenzhen.

The Hang Seng China Enterprises Index fell 3.3 per cent last week, making it one of the worst 10 performers among global primary markets, according to Bloomberg. Meanwhile, mainland blue-chip stocks, represented by the CSI 300, added 1.3 per cent. It was the widest performance gap between the two in six months and left watchers scrambling for explanations, since Hong Kong represents a western assumption that China’s markets will eventually focus on long-term fundamentals, not short-term momentum trading, as they mix with international norms.

The fundamental outlook for Chinese stocks is in fact picking up. Earnings are rising, with analysts lifting forecasts on about half of companies — the most positive level since 2013, according to Société Générale. Economic data also suggest a steadying outlook, with producer prices rising for the first time since 2012.