Hong Kong stocks end flat after China's factory deflation data

Hong Kong stocks closed flat on Tuesday, even as data showed China's factory deflation deepened in August amid a protracted trade dispute with the United States.

The Hang Seng index was unchanged at 26,683.68, while the China Enterprises Index lost 0.1%, to 10,403.34. For the past few sessions, both indexes had been trading in a narrow range following a surge a week ago after the withdrawal of a proposed extradition bill.

China's factory-gate prices shrank at the sharpest pace in three years in August, falling deeper into the deflationary territory and reinforcing the urgency for Beijing to step up economic stimulus as the trade war with the United States intensifies. An escalation of violence cannot solve social issues in Hong Kong, the leader of the Chinese-ruled city, Carrie Lam, said on Tuesday, adding that she deeply regretted interference by foreign parliaments in the Asian financial hub's matters.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.19%, while Japan's Nikkei index closed up 0.35%. The yuan was quoted at 7.1056 per U.S. dollar at 08:17 GMT, 0.22% firmer than the previous close of 7.121.

The top gainers among H-shares were China Telecom Corp Ltd up 4.46%, followed by China Communications Construction Co Ltd, gaining 2.57% and PetroChina Co Ltd, up by 2.43%. The three biggest H-shares percentage decliners were ENN Energy Holdings Ltd, which was down 4.28%, China Tower Corp Ltd, which fell 3.16% and China Gas Holdings Ltd, down by 2.99%.

At close, China's A-shares were trading at a premium of 30.22% over Hong Kong-listed H-shares.

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