Hong Kong stocks closed higher on Monday as weaker Chinese inflation data raised expectations for additional policy support to boost domestic demand.

The Hang Seng Index gained 269.46 points, or 1.1%, to close at 25,937.49, while the Hang Seng China Enterprises Index rose 90.26 points, or also 1.1%, to 8,621.84.

China's consumer inflation slowed to 0.5% in July from 1% in June, while producer prices also fell more than expected, pointing to continued weakness in domestic price pressures.

Investors also monitored oil prices and awaited U.S. inflation data due Wednesday.

In corporate developments, Kinetic Development Group (HKG:1277) jumped 9% after forecasting an up to a 40% year on year increase in first-half net profit to 730 million yuan to 780 million yuan.

Auntea Jenny (HKG:2589) plunged more than 23% after certain shareholders extended restrictions on selling their shares until Nov. 7.