By Laura He, MarketWatch

HONG KONG (MarketWatch) -- Tracking losses in the U.S. markets, Hong Kong stocks on Wednesday tumbled after China's consumer inflation and wholesale deflation both eased in June.

China's consumer-price index rose 2.3% in June from a year ago moderating from a 2.5% year-over-year increase in May and slightly below than the 2.4% gain projected in separate Dow Jones News Wires and Reuters surveys of economists. Meanwhile, the producer-price index dropped 1.1% from a year earlier, compared with a 1.4% decline in May.

The Hang Seng Index lost 1.6% at the close, falling the most since June 24. It logged the lowest closing level in about two weeks, dragged down by banks and tech stocks.

Bank of China , one of the country's biggest state-owned banks, led the broad decline in the banking sector with a solid 2.8% loss, after China's state broadcaster CCTV accused the bank of assisting in money-laundering and fraudulent transactions.

Chinese Internet giant Tencent Holdings was also a main drag on the benchmark index, sliding 3.3%. Online game developer Baioo Family Interactive sank 6%.

Over on the mainland, the Shanghai Composite Index finished 1.2% lower, suffering the biggest decline in almost three weeks.

In other Asian markets, Japan's Nikkei Average dipped 0.1%, marking its lowest settlement this month, while the yen (USDJPY) weakened to Yen101.63 per dollar from Yen101.52 per dollar on Tuesday. The broader Topix index closed down 0.4%.

Meanwhile, Sydney's S&P/ASX 200 retreated 1.1%, and Seoul's Kospi Composite Index dropped 0.3%.

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(END) Dow Jones Newswires

July 09, 2014 06:24 ET (10:24 GMT)

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