Hong Kong shares erased earlier losses and ended flat on Tuesday, as rebounding mainland stocks eased worries stemming from overnight weakness in global equity markets.
Mainland shares rebounded for the second day on expectations that Beijing will launch new stimulus measures to aid a weakening economy and head off deflation risks.
China’s annual consumer inflation hit a five-year low in January, while factory deflation deepened, underscoring persistent weakness in the economy.
Analysts say poor economic data published recently has raised the prospects of additional monetary easing by the government, potentially lending support to the stock market.
The Hang Seng index was unchanged at 24,528.10, while the China Enterprises Index gained 0.4 per cent to 11,695.26 points.
Among the most actively traded stocks on Hong Kong’s main board were CCT Land, unchanged at HK$0.02; SMIC, up 4.4 per cent at HK$0.72; and Chaoda Modern, up 18.5 per cent at HK$0.39.
Total trading volume of companies included in the HSI index was 1.1 billion shares.