Hong Kong stocks fell 8.85 points, or 0.04 percent, to close at 21,718.05 on Monday. The benchmark Hang Seng Index traded between 21,772.23 and 21, 612.05. Turnover totaled 58.05 billion HK dollars (7.48 billion U.S. dollars).

FRANKFURT (Reuters) - Hutchison Whampoa <0013.HK> is in talks to buy up to 29.9 percent of Telecom Italia <TLIT.MI>, although discussions are at an 'embryonic stage' and it may take months to strike a deal, a source familiar with the negotiations said on Tuesday. Hutchison Whampoa could swap its Italian mobile operator 3 Italia for some Telecom Italia capital and then buy more Telecom Italia shares from a group of Italian shareholders in investor holding company Telco, the source said.

Hong Kong and Shanghai stocks rose on Tuesday after Chinese inflation came in below forecasts, soothing concerns lawmakers will introduce fresh tightening measures. In Hong Kong the benchmark Hang Seng Index climbed 0.70 percent, or 152.29 points, to end at 21,870.34 on turnover of HK$57.35 billion ($7.40 billion). Chinese shares closed 0.64 percent higher. The benchmark Shanghai Composite Index rose 14.19 points to 2,225.78 on turnover of 73.1 billion yuan ($11.8 billion). dan/pdh

By Lawrence White HONG KONG (Reuters) - Luo Juncheng, a delivery man and school dropout from China's Guangdong province, was 19 years old when he opened an account at Bank of China subsidiary Chiyu Bank in Hong Kong in mid-2009. Over the next eight months, he moved more than HK$13 billion ($1.7 billion) through the account, making nearly 5,000 deposits and more than 3,500 withdrawals in the largest money laundering case on record in the territory.