6:00AM New York, 6:00PM Hong Kong - China’s first quarter GDP eases to 10.6% and CPI slows to 8.3% in March.

Hong Kong stock averages fell after reports on robust first quarter economic growth stoked fears that the government will further intervene with tightening measures meant to prevent the economy from overheating.

Market sentiment

In Hong Kong trading Hang Seng Index declined 0.10% or 22.98 to 22,878.35, and the China Enterprises Index of Hong Kong-listed companies, or H shares, dropped 0.56% or 71.53 to 12,593.88.

In Shanghai trading, CSI 300 Index fell 2.49% or 89.25 to 3,494.02.

Daily turnover on main-board was HK$64.63 billion compared with HK$71.45 billion yesterday.

China’s GDP eases to 10.6% in first quarter

The National Bureau of Statistics reported that China’s economic growth eased from 11.7% realized in the first quarter of 2007 to 10.6% in the first three months of 2008.

GDP growth continued despite the inclement weather conditions at the beginning of the year and ongoing turmoil in the global credit markets.

The NBS also reported that industrial production rose 16.4% from a year ago in the first quarter, 1.9% lower than in the first quarter 2007.

Fixed asset investment grew 24.6% on the year to Rmb2.18 trillion.

Separately, the statistics bureau reported that China''s consumer price index increase slowed to 8.3% in March from 8.7% in February.

Li Xiaochao, the NBS spokesperson added that CPI for the first quarter of the year reached 8% and in the quarter inflation increased 7.8% for urban areas and 8.7% for rural areas.

According to the statistics office, food prices spiked 21%, driving CPI up by 6.8%. Also housing prices and rents rose 6.6% on average, nudging the index by one percentage point.

On the overall, first quarter retail prices grew 7.4%, 5.3% points higher from a year ago, while the producer price index, or PPI, rose 6.9% or 4% higher from a year ago.

Prices of raw materials, fuels and power supply also advanced 9.8% in the first three months of this year, 5.7% higher than the level for the same period a year ago.

Gainers & Losers

Stocks in Hong Kong fell on fears the government may issue tighter fiscal measures.

Shares of PICC Property and Casualty fell 11.4% to HK$6.77 after China''s largest property insurer posted disappointing earnings for 2007.

Oil and gas producer CNOOC rose 3% as crude oil prices climbed above $114 per barrel yesterday on supply disruptions in Mexico.