China shares inched higher on Monday, outperforming other Asia markets as investors chased strength in retailers ahead of a week-long holiday, with the Shanghai benchmark heading for its biggest quarterly gain in three years.
But Hong Kong markets sank to their lowest in two weeks, hurt by a subpar reading in a private survey on factory activity in the mainland and fears that a US government shutdown seemed increasingly likely.
At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was up 0.4 per cent, while the Shanghai Composite Index climbed 0.6 per cent.
On a normal day, the A-share market will probably have dipped given the negative surprise from the flash PMI, but this is the eve of a one-week holiday
On the quarter, they are up 9.3 and 9.8 per cent, respectively – the best for the Shanghai benchmark since the third quarter in 2010.
The Hang Seng Index sank 1.1 per cent to 22,951.5 points, its lowest since September 13. The China Enterprises Index of the top Chinese listings in Hong Kong sank 1.3 per cent. If losses hold, this would be their biggest daily loss since August 28.
On the quarter, they are up 10.3 and 11.3 per cent, respectively.
Volumes in both Hong Kong and mainland markets were light ahead of a holiday. Hong Kong will be shut October 1, and the mainland October 1-7.
“On a normal day, the A-share market will probably have dipped given the negative surprise from the flash PMI, but this is the eve of a one-week holiday,” said Guo Yanling, an analyst with the brokerage firm Shanghai Securities.