November 11, 2019 / 4:30 AM / a month ago

China and Hong Kong stocks drop as weak data, protests weigh

* SSEC -1.2%, CSI300 -1.3%, HSI -2.1%

* HK->Shanghai Connect daily quota used 0.6%, Shanghai->HK daily quota used 3.8%

* FTSE China A50 -1.3%

SHANGHAI, Nov 11 (Reuters) - China and Hong Kong stocks fell on Monday, with Hong Kong stocks dropping the most in nearly three months, amid worries over the political unrest in Hong Kong and downbeat data on the mainland.

** The CSI300 index fell 1.3% to 3,922.20 points at the end of the morning session, while the Shanghai Composite Index lost 1.2% to 2,928.04 points.

** The Hang Seng index dropped 2.1% to 27,070.55 points, on track for its steepest single-day drop since Aug.13, while the Hong Kong China Enterprises Index lost 1.8% to 10,682.66 points.

** Hong Kong police opened fire and hit at least one protester on Monday, media reported, as chaos erupted across the city a day after officers fired tear gas to break up demonstrations that are entering their sixth month.

** China’s producer prices fell the most in more than three years in October, as the manufacturing sector weakened on declining demand and a knock from the Sino-U.S. tariff war, reinforcing the case for Beijing to keep the stimulus coming.

** In contrast, China’s consumer prices rose at their fastest pace in almost eight years, driven mostly by a surge in pork prices as African swine fever ravaged the country’s hog herds.

** “That’s the worst combination, with strong CPI and weak PPI,” said Alex Wong, an analyst with Ample Finance Group.

** “Judging from the modest interest rate cut on MLF loans earlier this month, the rising inflation somewhat hindered (the easing) of China’s monetary policy,” China Merchants Securities noted in report.

** China’s central bank cut the interest rate on its one-year medium-term lending facility (MLF) loans for the first time since early 2016, as policymakers work to prop up a slowing economy hit by weaker demand at home and abroad.

** Hong Kong stocks were also pressured by worries over the political unrest on the island city, and the uncertainties around the Sino-U.S. trade talks, Ample Finance’s Wong said.

** U.S. President Donald Trump said on Saturday that trade talks with China were moving along “very nicely,” but the United States would only make a deal with Beijing if it was the right deal for America.

** That came after his comments on Friday that he has not agreed to rollbacks of U.S. tariffs sought by China.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.94% while Japan’s Nikkei index was down 0.24%.

** The yuan was quoted at 7.0008 per U.S. dollar, 0.08% weaker than the previous close of 6.9954.

** So far this year, the Shanghai stock index is up 18.86%, while China’s H-share index is up 7.5%. Shanghai stocks have risen 1.2% this month.

** As of 04:06 GMT, China’s A-shares were trading at a premium of 28.58% over the Hong Kong-listed H-shares. (Reporting by Luoyan Liu and John Ruwitch; Editing by Shailesh Kuber)

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