BEIJING: Chinese stocks dropped for a second day in Hong Kong trading, dragged down by financial and energy companies, after inflation data signaled more weakness in the world’s second-biggest economy.
The Hang Seng China Enterprises Index fell 0.8 percent to 10,352.12 at 1:06 p.m. China Oilfield Services Ltd. and Industrial & Commercial Bank of China Ltd. slid at least 1.6 percent. The Shanghai Composite Index slipped 0.1 percent. Stocks fluctuated as traders weighed the prospects of stimulus to counter the slowdown. The consumer-price index rose 1.6 percent in September, compared with the 1.8 percent median estimate. The producer-price index fell 5.9 percent, extending its streak of negative readings to 43 months.
“China is still in an industrial deflationary trajectory,” said Dai Ming, a fund manager at Hengsheng Asset Management Co. in Shanghai, who’s adding to stock holdings. “The government will continue to stimulate growth through monetary and fiscal policies, probably at a measured pace.”
With consumer inflation well below the government target of 3 percent all year, the central bank has further capacity to spur lending even after cutting interest rates five times since November. The government data follow a trade report on Tuesday that showed a bigger-than-estimated plunge in imports in September and puts more pressure on policy makers to add to stimulus to meet their 7 percent growth target for the year.
