China's factory-gate prices shrank at the quickest pace in three years in August, falling deeper into deflationary territory. China's producer price index (PPI), reflecting the prices that factories charge wholesalers for their products, fell 0.8% in August. In July, the PPI fell into negative territory, at minus 0.3% compared to a year ago, and down from the flat reading in June.
China's consumer prices rose 2.8% year-on-year in August, the same pace of growth as seen in July, figures from the National Bureau of Statistics showed Tuesday. Food prices surged 10% driven by pork prices. Meanwhile, non-food price inflation eased to 1.1% from 1.3%. Excluding food and energy, core inflation came in at 1.5% versus 1.6% in July. On a monthly basis, consumer prices gained 0.7% after rising 0.4% in July. This was the second consecutive increase in prices.
Blue chips were mixed. HSBC (00005) gained 1.2% to HK$58.9 after it was appointed as an adviser on the initial public offering of Saudi Arabia's national oil giant Aramco. HKEX (00388) shed 1.7% to HK$245.2. Tencent (00700) fell 0.6% to HK$340.2. China Mobile (00941) rose 0.3% to HK$66.2. AIA (01299) was steady at HK$79.7.
Shares of jewellery and watch making sector was the top loser industry in Hong Kong, on reports that August visitor numbers to the city were down nearly 40% from a year ago, which is second biggest year-on-year decline since May 2003 when the deadly Sars epidemic pushed visitor numbers down by 70%. Jewellery retailer Chow Tai Fook fell 2.2% to HK$6.79. Oriental Watch finished down 2.9% at HK$1.65.
Shares of telecom players were higher, with China Telecom up 4.7% to HK$3.76 and China Unicom up 5% at HK$8.44. The gains in China Telecom and China Unicom came after an announcement Monday that they will cooperate to build a nationwide 5G network.
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