Hong Kong stock ended up with uprise, S&P report creates little worry

Adding to worries was an S&P Global rating report that said off-balance-sheet borrowings by Chinese local governments could be as high as 40 trillion yuan.

Stocks in Hong Kong ended higher on Tuesday, gaining a footing after recent losses, although data showing cooling factory-gate inflation in China for a third straight month in September and a warning from S&P on government debt curbed further gains.

The Hang Seng index ended 0.1 per cent higher at 25,462.26 points, while the China Enterprises Index closed 0.5 per cent higher at 10,198.33 points.

China's factory-gate inflation cooled for a third straight month in September amid ebbing domestic demand, pointing to more pressure on the world's second-biggest economy as it remains locked in an intensifying trade war with the United States.

Adding to worries was an S&P Global rating report that said off-balance-sheet borrowings by Chinese local governments could be as high as 40 trillion yuan ($5.78 trillion) and amount to "a debt iceberg with titanic credit risks".

The sub-index of the Hang Seng tracking energy shares rose 1.5 per cent, while the IT sector dipped 0.27 per cent, the financial sector was 0.15 per cent lower and property sector dipped 0.3 per cent.

The top gainer on Hang Seng was Country Garden Holdings Co Ltd, which ended up 3.68 per cent, while the biggest loser was WH Group Ltd, which closed down 3.51 per cent.

The blue-chip CSI300 index ended 0.8 weaker at 3,100.97 points, while the Shanghai Composite Index also closed 0.8 per cent lower at 2,546.33 points.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.46 per cent, while Japan's Nikkei index closed 1.25 per cent higher.

The yuan was quoted at 6.9181 per U.S. dollar at 0822 GMT, 0.01 per cent firmer than the previous close of 6.9185.

As of the previous trading session, the Hang Seng index was down 14.95 per cent this year, while China's H-share index was down 13.4 per cent. As of the previous close, the Hang Seng has declined 8.43 percent this month.

The top gainers among H-shares were China Huarong Asset Management Co Ltd, which closed up 5.76 per cent, followed by People's Insurance Group of China Co Ltd, which ended 2.82 per cent firmer and CSPC Pharmaceutical Group Ltd, which closed 2.68 per cent higher.

The three biggest H-shares percentage decliners were China Railway Group Ltd, which ended down 4.15 per cent, Great Wall Motor Co Ltd, which closed 1.9 per cent lower and Air China Ltd, which ended down 1.7 per cent.

About 1.51 billion Hang Seng index shares were traded, roughly 82 per cent of the market's 30-day moving average of 1.84 billion shares a day. The volume traded in the previous trading session was 1.66 billion.

At the close, China's A-shares were trading at a premium of 22.33 per cent over the Hong Kong-listed H-shares.

The price-to-earnings ratio of the Hang Seng index was 9.86, as of the last full trading day, while the dividend yield was 3.7 per cent.

So far this week, the market capitalisation of the Hang Seng index dropped 1.51 per cent to HK$16.54 trillion.

The short and one-factor leveraged Hang Seng index, which is designed to replicate the payoff of a short or leveraged portfolio and is linked to the movements of the Hang Seng Index, was lower by 0.06 per cent on the day at 5,484.88 points.