Hong Kong and Shanghai stocks slipped on Thursday, as slow consumer inflation and deepening factory gate deflation data suggested an uneven recovery for China and stoked deflation worries.

 

** China's blue-chip CSI 300 Index edged up 0.1% by the end of the morning session, while the Shanghai Composite Index slipped 0.1%.

** Hong Kong's Hang Seng Index lost 0.2%, and the Hang Seng China Enterprises Index declined 0.1%.

** However, some other Asian shares rose as investors cheered signs of easing inflationary pressure in the U.S. after data showed consumer prices in April rose at a slower-than-expected pace.

** China's consumer prices rose at the slowest pace in more than two years in April, while factory gate deflation deepened, data showed, suggesting that more stimulus might be needed to boost a patchy post-COVID economic recovery.

** "The subdued inflation readings suggest post-COVID recovery momentum continued to weaken in April," said Ting Lu, chief China economist at Nomura.

** "China will likely experience a short period of CPI deflation in the coming months," said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

** The weak consumer price rise reinforces the signals from this week's trade data suggesting domestic demand remains lacklustre.

** Shares in energy went down 0.9%, and artificial intelligence firms dropped 1.1%. Meanwhile, new energy and media firms jumped 1.5% and 3.4%, respectively.

** Tech giants listed in Hong Kong added 0.9%, with Alibaba up 1.6%.

** Separately, sources said China has told its "big four" state-owned banks to reduce the ceiling on interest rates they pay on some deposits, as banks face squeezed margins under the weight of huge inflows of savings and deposits amid rising economic risks. (Reporting by Shanghai Newsroom; Editing by Rashmi Aich)