Hong Kong blue chips traded 100 points higher early in the day, but a decline in Mainland markets capped gains. Funds flowed into insurance companies, but automakers retreated.
Hong Kong blue chips opened higher on speculation there would be progress in Greek debt negotiations and broke through the 21,000 resistance level in the afternoon following a rally in Shanghai.
China stocks are stuck in a narrow range for now, pulled up by prospects of credit easing in China and down by an unending flow of bad news about Europe's debt crisis.
China and Hong Kong stocks tumbled after the HSBC preliminary manufacturing PMI fell sharply to 48.0, indicating slowing growth in China. Resources stocks posted steep losses.
Hong Kong followed U.S. markets lower in very thin turnover, slipping below its 10-day moving average. Hong Kong's Hang Seng Index sank 1.8 percent, and the index of Chinese companies fell 2.7 percent.
News of a European interest rate cut and the decision by Greek leaders not to put the Europe debt solution plan to a vote triggered a sharp rise in the Hong Kong market.