China, Hong Kong stocks slip on soft factory-gate inflation data

China and Hong Kong stocks shed earlier gains to edge lower on Tuesday, after data showed factory-gate inflation had cooled for a third straight month in September amid lean domestic demand, reflecting more pressure on the world's second-biggest economy.

The CSI300 index rose as much as 1.3 per cent before dipping 0.1 per cent to 3,125.04 points at the end of the morning session, while the Shanghai Composite Index climbed 1.2 per cent earlier in the trade before losing 0.2 per cent to 2,564.24 points.

The Hang Seng index dropped 0.2 per cent to 25,396.19 points, while the Hong Kong China Enterprises Index gained 0.2 per cent to 10,168.63 points.

China's factory-gate inflation cooled for a third straight month in September amid ebbing domestic demand. Consumer inflation, on the other hand, picked up slightly in September from the previous month, led mainly by higher food prices, official data showed on Tuesday.

There were also worries over the increasing tension between Saudi Arabia and the West that have fanned geopolitical concerns.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.10 per cent, while Japan's Nikkei index rose 0.32 per cent. The yuan was quoted at 6.9245 per US dollar, 0.09 per cent weaker than the previous close of 6.9185.

Largest percentage gainers in the main Shanghai Composite index were Guirenniao Co Ltd , which gained 10.09 per cent, followed by Shanghai Laimu Electronics Co Ltd , which climbed 10.04 per cent and YanTai Yuancheng Gold Co Ltd , which rose 10.02 per cent.

Largest percentage losses in the Shanghai index were Joincare Pharmaceutical Group Industry Co Ltd , which lost 10.05 per cent, followed by Kangmei Pharmaceutical Co Ltd , which slipped 10.02 per cent and Shanghai Lansheng Corp, which fell 10.01 per cent.

So far this year, the Shanghai stock index plunged 22.35 per cent, while China's H-share index lost 13.4 per cent. Shanghai stocks declined 8.98 per cent this month. Top gainers among H-shares were China Huarong Asset Management Co Ltd, which rose 5.76 per cent, followed by China Shenhua Energy Co Ltd, which gained 3.39 per cent and Huaneng Power International Inc , which climbed 2.44 per cent.

The three biggest H-shares percentage decliners were China Railway Group Ltd , which fell 4.02 per cent, Air China Ltd, which lost 2.7 per cent and Tencent Holdings Ltd , which slipped 2.6 per cent.

About 6.28 billion shares have traded so far on the Shanghai exchange, roughly 52.6 per cent of the market's 30-day moving average of 11.94 billion shares a day. The volume traded was 11.86 billion as of the last full trading day.

As of 0401 GMT, China's A-shares were trading at a premium of 23.17 per cent over the Hong Kong-listed H-shares. The Shanghai stock index is below its 50-day moving average and below its 200-day moving average. The price-to-earnings ratio of the Shanghai index was 10.98, as of last trading day, while the dividend yield was 2.9 per cent.

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