New | Hong Kong stocks end lower before holiday, mainland markets buoyed by services data

Hong Kong stocks ended marginally lower on Tuesday ahead of a public holiday, while mainland Chinese markets closed at their highest levels in nearly two months, led by gains in industrials and smaller companies following the release of data showing an upturn in the services sector.

The Hang Seng Index and mainland-tracking H-share index both gave up 0.4 per cent, ending at 22,989.22 and 10,649.45, respectively. Markets in Hong Kong will be closed Wednesday in observance of the Chung Yeung Festival. Trading will resume on Thursday.

The Shanghai Composite Index finished 1.1 per cent higher at 3,425.33 and the Shenzhen Composite Index gained 2 per cent to 2008.4.

Outstanding margin lending balance, an indicator to track people’s buying of stocks with borrowed money in the Shanghai and Shenzhen bourses, rose for a seventh day in a row nearing one trillion yuan Monday.

Julian Evans-Pritchard, the Singapore-based China economist with Capital Economics, said the detailed breakdown of China’s third-quarter GDP data released Tuesday, helped to shed light on activity in the service sector.

“As expected, cooling trading activity following the stock market rout pulled down financial sector growth. However, this was offset by the remaining service sector components which, after adjusting for seasonal factors, all contributed more to growth last quarter. The improvement in most of these components corroborates what we have seen in the monthly data – growth in freight and passenger traffic, property sales and retail sales all picked up in the third quarter,” Evans-Pritchard said in a note following the data release.

Jason Song, a strategist with Guotai Junan International, said the markets were also looking ahead to a gathering of senior political leaders, as the nation’s capital prepares for the annual meeting of the Communist Party's Central Committee from Monday.