Update | China's stock markets end morning off, Hong Kong rises and Shanghai prune losses

China stocks slumped for a fourth day on Tuesday morning, extending the steepest rout since 2007, as investors have yet to take notice of any supporting measures by the government to rescue the sinking market, but Hong Kong stocks climbed on bargain-hunting given the its script had fallen more than 20 per cent since April.

There are signs though of stabilisation in the A share market in China, underscored by net capital inflows  through the Hong Kong-Shanghai stock connect. Foreign investors have purchased net 3.69 billion yuan worth of shares in the A-share market in the morning, while mainland investors pulled HK$388 million from the Hong Kong market, according to the city’s stock bourse.

The Shanghai Composite Index fell 4.33 per cent, or 138.85 points, to 3,071.06 by the midday break, while the CSI 300 Index shed 3.9 per cent, or 127.77 points, to 3,147.76. At one point, Shanghai was down over 6 per cent in early trade.

Hong Kong’s benchmark Hang Seng Index rose 1.62 per cent, or 344.17 points, to 21,595.74 before the lunch break.

“For us, the rout is a buying opportunity, not a market inflection. Globally, the China slowdown is creating headwinds for industrial capital goods and commodities. But we see no shortage of stock-specific investment opportunities in our broader investment universe,” said Mikhail Zverev, head of global equities, Standard Life Investments.