China stocks dip, Hong Kong wobbles as recovery worries weigh

HONG KONG, May 15 (Reuters) – China stocks started the week on a weak foot Monday, as a slew of downbeat economic data dampened investor confidence and heightened deflation fears.

** China’s blue-chip CSI 300 Index dipped 0.24%, while the Shanghai Composite Index fell 0.94%.

** Hong Kong’s Hang Seng Index inched up 0.14%, and the Hang Seng China Enterprises Index were flat.

** The country’s central bank on Monday rolled over maturing medium-term policy loans while keeping interest rates unchanged, despite growing concerns on the subdued recovery.

** Yuan on Monday weakened to its lowest point in more than two months after the dollar firmed on a jump in US consumers’ long-term inflation expectations.

** “Market sentiment remains very weak in our client conversations,” Hui Shan, chief China economist at Goldman Sachs said in a note.

** Discussions have quickly turned from “policymakers may tighten on better-than-expected data” last month to “policy should ease to stem deflation risks”, after April imports, inflation and bank lending data all missed consensus expectations last week, she said.

** On the geopolitical front, Washington and the EU will pledge joint action to tackle concerns focused on China about non-market practices and coordinate their export controls on semiconductors and other goods at a meeting this month, Reuters reported.

** Media stocks and telecom stocks  fell 4% and 3.2% respectively.

** However, new energy sector  jumped 2.9%, capping some losses.

** Hong Kong-listed tech firms slid 0.1%. Index heavyweight Tencent Holdings Ltd gained 2.7%.

** US-listed Chinese ADRs including and Tencent and Alibaba Group Holding Ltd are due to report first-quarter earnings this week.

(Reporting by Summer Zhen; Editing by Varun H K)