HONG KONG (NewsRise) -- Hong Kong hovered near four-month highs on Tuesday as investors digested the implications of an acceleration in China's inflation. Gaming companies advanced while energy producers retreated.
Government data released Tuesday showed China's consumer inflation climbed 2.5% in January from a year earlier, its highest level since May 2014, while the monthly producer price index jumped 6.9% from 5.5% in December. Another set of solid cues from Wall Street, where major indexes all jumped to fresh records overnight, helped sentiment on speculation President Donald Trump will cut taxes for businesses and individuals.
Hong Kong stocks have been supported after the Chinese New Year holidays by upbeat flows from the mainland via the Shanghai and Shenzhen exchange connect programs.
"The short-term outlook for Hong Kong markets looks quite stable with southbound flows and strength in U.S. markets providing support," said Andrew Sullivan, managing director for sales trading at Haitong International Securities. "China's inflation data, while ahead of estimates, was within the country's policy makers' parameters."
The Hang Seng Index was little changed at 23,712.17. The gauge, up 7.8% so far this year, had dropped as low as 23,614.47 earlier. While the index moved in narrow ranges, activity remained strong, with more than HK$50 billion ($6.4 billion) of shares changing hands on the main board.
Sands China added 3.7% after sinking to a five-month low on Monday and Galaxy Entertainment Group climbed 4.2% to pace consumer-discretionary shares. PetroChina and CNOOC lost at least 1.2% after U.S. crude prices fell 1.7% overnight.
AAC Technologies Holdings, a supplier to Apple, advanced 1.9% after the iPhone maker climbed to a record high in U.S. trading Monday.
The Hang Seng China Enterprises Index of mainland companies listed in the city added less than 0.1% to 10,265.97. In mainland trading, the Shanghai Composite Index and the Shenzhen Composite Index slipped 0.1% each. The yuan traded onshore was flat at 6.8750 to a U.S. dollar.
Despite the acceleration in January, China's consumer and producer price indexes were both expected to "peak soon," Julian Evans-Pritchard, China economist at Capital Economics, wrote in a report.
"The base effects that have boosted year-on-year price gains in recent months are soon going to go into reverse," he said. "Meanwhile, tighter monetary policy, slowing income growth and cooling property prices should keep broader price pressure contained over the medium-term."
Leshi Internet Information & Technology climbed 4.3% in Shenzhen trading after the company's controlling shareholder Jia Yueting proposed awarding 20 new shares for every 10 shares held by all shareholders, according to a Reuters report. The company also reportedly said its major shareholders don't plan to cut their stake in the next six months.
Greenland Holdings slipped 0.5% in Shanghai after saying it acquired four property projects with land value of 3.1 billion yuan ($451 million) in January.
The Nikkei Asia300 Index of some of the region's most influential companies fell 0.3% to 1,114.80.
Television Broadcasts surged 8.2% to HK$32.85 after it revised a share buyback plan. The company raised the offer price to HK$35.075 per share from HK$30.50 earlier even as it reduced the number of shares to be repurchased to 120 million from 138 million. The latest offer came after it received an unsolicited conditional offer from TLG Movie and Entertainment Group earlier this month.
Alibaba Group Holding's cloud-computing arm has doubled data storage and processing capacity of its Hong Kong data center to meet the rising demand, South China Morning Post reported. The stock added 0.7% to $103.10 overnight in U.S. trading.
United Co. Rusal dropped 3.9% in Hong Kong following reports Onexim Group was selling a 2.5% stake in the Russian aluminum producer.
China Eastern Airlines declined 0.7%. The airline said it carried 12.6% additional passengers in January from the year earlier.
-- V. Phani Kumar and Nimesh Vora