Hong Kong shares fell for a third straight day on Tuesday, as weak import growth in China last month fuelled concern over flagging domestic demand, with investors expecting more disappointing macroeconomic data out of China later this week. Mainland Chinese markets sank to six-month lows after data showed China's imports rose 6.3 percent in June from a year earlier, less than half the 12.7 percent increase forecast in a Reuters poll.
Profit concerns dominated both markets, with an eye ahead to the upcoming earnings reporting season in August. The Hang Seng Index shed 0.2 percent, while the China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.6 percent. Turnover was among the lowest for the year so far.
In the mainland, the large cap-focused CSI300 Index closed down 0.4 percent at 2,406.7, the lowest since January 16. The Shanghai Composite Index slipped 0.3 percent as trading volumes declined 21 percent from Monday.
"Turnover is not going to improve anytime soon with data now suggesting the slowdown in the Chinese economy is nowhere near a bottom," said Edward Huang, an equity strategist with Haitong International Securities.
Growth-sensitive sectors were among the biggest drags in both markets, but the Chinese property sector was particularly weak after Poly Real Estate, China's second-largest property developer by market value, reported unaudited first half net profit that was 12 percent below a year earlier.
Poly slumped 3.6 percent in Shanghai, dragging the Shanghai property sub-index down 2.1 percent. A gauge of property developers listed in Hong Kong also underperformed the broader market, down 0.8 percent.
Shares of ZTE Corp closed in Hong Kong and Shenzhen at the lowest in more than three years due to concerns over its first-half earnings and a dispute between the European Union and China over industry subsidies.
The world's No 5 telecommunications equipment maker by sales dived 5.5 percent in Shenzhen and 8.8 percent in Hong Kong in heavy volumes.
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