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SHANGHAI, May 10 (Reuters) - Hong Kong shares rose for the third straight session on Wednesday to close at new 21-month highs, even as Shanghai stocks fell to seven-month lows after China's producer price inflation cooled more than expected.
Sentiment was lifted by strength in many Asian markets as investors focused on strong corporate earnings, as well as signs that money was continuing to flow in from mainland China.
On Wednesday, Chinese investors used up roughly 30 percent of the daily quota buying Hong Kong stocks under the Shanghai-Hong Kong Stock Connect scheme.
The Hang Seng index rose 0.5 percent, to 25,015.42, while the China Enterprises Index gained 1.0 percent, to 10,227.42 points.
Investors appear to have shrugged off news that China's April producer price inflation cooled, signalling that manufacturing activity may be losing momentum along with other sectors of the economy.
Sector performance was mixed, with financials and telecom stocks rising while resource shares lost ground.
Tencent rose to a fresh record intraday-high but gave up gains at the close, falling 0.1 percent. (Reporting by the Shanghai Newsroom; Editing by Jacqueline Wong)