HONG KONG - Hong Kong-listed shares in China South Locomotive and Rolling Stock Corp Ltd fell 2.5 percent on Thursday after the company denied a rumor that it was in merger talks with the order dominant State-owned railway equipment maker, Reuters reported.

Beijing was considering merging CSR with China North Locomotive and Rolling Stock Corp Ltd to lead a high-speed rail export drive, the Financial Times reported on Wednesday.

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"China South Locomotive is not in talks or in studies for the possible merger with China North Locomotive," CSR said in a statement on its website. "The recent news relating to the merger rumor is unrelated to the company and we regret the spread of the rumor."

Shanghai-listed shares of China South Locomotive were down 1.8 percent after surging about 10 percent in the past two days. China North Locomotive, which climbed a combined 14 percent on Tuesday and Wednesday, eased 2 percent.

The merger of the two rail equipment manufacturers had became a hot topic amid the reorganization of State-owned companies, with the State-owned Assets Supervision and Administration Commission supporting the merger and the National Development and Reform Commission disagreeing, local media reported.