The Shanghai-Hong Kong stock connect got under way on Monday, in a sea change that will crack open China's A-share markets to foreign investment, potentially breaking the market out of a long downturn.
The program will allow foreign investors to place buy or sell orders on Shanghai's A-share market through brokers in Hong Kong. Chinese investors meanwhile will be able to use mainland brokers to invest in Hong Kong's H-share market.
The Shanghai Composite initially opened higher, rising as high as 2508, before slipping into negative territory, ending the day down around 0.2 percent. The index is down around 25 percent over the past five years and still well off its peak of just over 6000 in late 2007.
Hong Kong stocks also rose at the start of Monday's session before reversing gains to end trade around 1.2 percent lower.
"This is the beginning of the end of China's capital controls. This is a big step toward integrating capital markets between mainland China and Hong Kong," Steven Sun, head of China equity strategy at HSBC, told CNBC. "It's going to lead to one country, one market."
Since 2003, selected major institutions have had access to A-shares under China's "Qualified Foreign Institutional Investor" program (QFII), but Stock Connect will open about 90 percent of Shanghai's total market capitalization to global investors.
"Stock connect facilitates the gradual opening of the mainland capital account and the internationalization of the renminbi as an investment currency for global investors," CY Leung,chief executive of the Hong Kong special administrative region, said in an address at the Hong Kong Stock Exchange.