Key Takeaways
- Chinese and Hong Kong stocks fell on Thursday due to oil price concerns.
- US inflation data is expected to influence the Federal Reserve’s policy outlook.
- Chinese AI startup DeepSeek is preparing for an IPO on Shanghai’s tech-focused market.
Chinese and Hong Kong stocks experienced a decline on Thursday, with the benchmark Shanghai Composite index dropping 0.4% and the blue-chip CSI300 index also losing 0.4%. The smaller Shenzhen index was down 0.7%, while the startup board ChiNext Composite index fell 0.2% and the Shanghai’s tech-focused STAR50 index eased 0.4%. In Hong Kong, the Hang Seng index fell 1.3%, and tech shares dropped 2.1%. The decline was attributed to escalating Middle East tensions and concerns over higher oil prices and inflationary pressures.
The biggest wave of attacks on shipping in the war with Iran kept oil prices above $100 a barrel, contributing to the market’s downward trend. Traders and analysts are anxiously awaiting US inflation data due later this week, seeking fresh clues on the Federal Reserve’s policy outlook and its potential impact on global financial markets.
Analysts at OCBC Bank stated, 'September FOMC decision remains a close call as investors await US CPI release.' The yield premium of the 10-year US Treasury over its Chinese counterpart widened to the highest level on record, driven by a surge in US yields amid worries that rising oil prices could fuel inflation.
Despite the overall decline, a survey showed that US companies in China have grown more optimistic about their business prospects. Confidence hit a record low last year amid political tensions, intense domestic competition, and slowing economic growth, but optimism has since improved.
Separately, Chinese artificial intelligence startup DeepSeek has tapped CITIC Securities to prepare for an initial public offering on Shanghai’s tech-focused STAR Market, according to sources. This move indicates ongoing interest in the tech sector despite the broader market’s concerns.
The decline in Chinese and Hong Kong stocks highlights the ongoing impact of global economic factors, particularly oil prices and inflationary pressures, on regional financial markets. Investors are closely monitoring upcoming US economic data to gauge the direction of global financial markets.
