Hong Kong stocks mark worst day in a week, Mainland shares ease on inflation data

** China's July factory-gate inflation eased to a 17-month low, defying global cost pressures as slower domestic construction weighed on raw material demand, although consumer prices picked up pace, driven mostly by tight pork supplies. ** "The COVID outbreaks in many cities and the lack of further policy stimulus may have led to weaker growth in July," said Zhang Zhiwei, chief economist at Pinpoint Asset Management.

Hong Kong stocks fell on Wednesday by their most in a week, dragged down by the property sector, while mainland China equities eased as slower-than-expected inflation reignited market concerns over weak domestic demand.

** At the close, the Shanghai Composite index eased 0.54% to 3,230.02, and the blue-chip CSI 300 index slipped 1.12% to 4,109.73. ** Financials edged down 0.72%, the real estate index lost 1.03%, and healthcare stocks fell 1.77%.

** In Hong Kong, the benchmark Hang Seng Index tumbled 1.96% to 19,610.84 in its biggest daily drop since Aug.2, while Chinese H-shares listed in Hong Kong fell 2.22%. ** The Hong Kong market tracked losses in global equities, as investors anxiously awaited U.S. inflation data, which could provide more clues on the Federal Reserve's trajectory of monetary policy tightening.

** The property sector was among the top losers after UBS downgraded major developers Country Garden, Longfor Group, as well as property management companies Country Garden Services and Jinke Smart Services , to "neutral" from "buy". An index tracking Chinese developers listed in Hong Kong fell 5.14%. ** China's July factory-gate inflation eased to a 17-month low, defying global cost pressures as slower domestic construction weighed on raw material demand, although consumer prices picked up pace, driven mostly by tight pork supplies.

** "The COVID outbreaks in many cities and the lack of further policy stimulus may have led to weaker growth in July," said Zhang Zhiwei, chief economist at Pinpoint Asset Management. ** The weaker demand as suggested by falling non-food prices in July from a month earlier weighed on the consumer sector, with an index tracking the performance of the sector falling 1.68% by the close.

** The defence sector outperformed the market with a 0.51% rise, underpinned by Sino-U.S. tensions over Taiwan.