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By Bloomberg

Investors piled into Shanghai shares on the first day of exchange-link trading, buying the maximum amount allowed in a sign of global demand for mainland equities as China opens up the $4.2 trillion market.

International investors purchased 13 billion yuan ($2.1 billion) of Shanghai shares by 1:57 p.m., triggering a halt in buy orders for the rest of the day. Mainland investors used about 1.4 billion yuan of their 10.5 billion yuan quota in Hong Kong. Trading through the link is running smoothly, according to brokerages including First Shanghai Financial Holding Ltd. and Emperor Securities Ltd.

Today’s debut marks one of China’s biggest steps toward opening up its capital account, increasing global use of the yuan and turning Shanghai into an international financial center. The quota system, which caps aggregate net purchases at 300 billion yuan in Shanghai and 250 billion yuan in Hong Kong, allows Chinese authorities to retain some control over cross- border money flows even as they broaden access to the biggest emerging market.

“It looks like overseas investors favor the stocks without Hong Kong listings,” Dai Ming, a money manager at Hengsheng Asset Management Co. in Shanghai, said by phone. “There isn’t much enthusiasm toward the Hong Kong stocks, and the problem is that local investors aren’t quite familiar with trading rules.”

Market Access

The Shanghai Composite Index climbed 0.3 percent, while the Hang Seng Index of Hong Kong shares fell 0.7 percent. Inner Mongolia Yili Industrial Group Co. and Tencent Holdings Ltd. were the first companies traded through the program in Shanghai and Hong Kong, respectively, according to Hong Kong Exchanges & Clearing Ltd.

The link allows any global investor with a Hong Kong brokerage account to buy a selection of Shanghai shares, expanding access to a 24-year-old market from a small number of foreign institutional money managers. Mainland traders with at least 500,000 yuan in their accounts are eligible to purchase Hong Kong shares through the connect.

Shanghai shares in the SSE 180 Index and SSE 380 Index are eligible, along with constituents of the Hang Seng Composite LargeCap Index and Hang Seng Composite MidCap Index in Hong Kong. Stocks with dual listings are also included.

Liquor maker Kweichow Moutai Co. and SAIC Motor Corp. each advanced more than 3 percent in Shanghai as the connect gives overseas investors access to more mainland consumer companies.

Opening China

Hong Kong Exchanges dropped 2.4 percent, paring gains to 39 percent since Premier Li Keqiang unveiled plans for the equity link in April, as the quota for mainland investors buying the city’s shares went largely unfilled. Tencent slid 1.8 percent in Hong Kong.

The Shanghai Composite advanced 17 percent this year through last week amid optimism the exchange link will attract fund inflows. That compares with a 3.4 percent gain in the Hang Seng Index.

“It’s a pragmatic, positive move,” Adrian Mowat, the chief Asia and emerging market equity strategist at JPMorgan Chase & Co., said in a Bloomberg TV interview. “It’s part of this progressive opening of the Chinese financial system to the global financial system.”

Most buy orders for Shanghai shares through the link are coming from individuals, said Eliot Li, director of corporate development, sales and marketing at First Shanghai. Corporate and institutional investors are observing the link’s debut and may trade through the program in the next few weeks, Li said.

“Trading is going smoothly, said Li. ‘‘In the very beginning, most of the orders are coming from individuals.’’