BEIJING: Chinese stocks dropped for a second day in Hong Kong trading after inflation data signaled more weakness in the world’s second-biggest economy.
The Hang Seng China Enterprises Index fell 1.1 percent to 10,321.37 at 10:23 a.m., led by financial and energy shares. China Petroleum & Chemical Corp. and Industrial & Commercial Bank of China Ltd. slid at least 1 percent. The Shanghai Composite Index halted its longest winning streak since July, losing 0.5 percent. 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.
The CSI 300 Index slid 0.5 percent. The Hang Seng Index lost 1 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.-listed Chinese companies, retreated 0.8 percent in New York on Tuesday.
