Global Market: China stocks inch up after August inflation data; Hang Seng remains flat

China’s stock markets edged higher on Wednesday, while Hong Kong equities remained largely flat as fresh inflation data pointed to an uneven economic recovery and weighed on investor sentiment.

The blue-chip CSI300 index rose 0.1% by the lunch break, while the Shanghai Composite gained 0.2%. In Hong Kong, the Hang Seng Index was unchanged, while the Hang Seng Tech Index slipped 0.6%.

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China’s factory-gate inflation accelerated in August, while consumer prices also picked up, with the increase driven largely by higher commodity and food prices amid supply risks linked to the conflict in the Middle East. However, subdued domestic demand continued to weigh on the broader economic outlook.

According to Reuters, prices rose notably in sectors including non-ferrous metal smelting and processing and energy. Meanwhile, household appliance prices fell back into negative territory, highlighting continued weakness in parts of consumer demand.

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The latest inflation figures offered little evidence of a broad-based improvement in the Chinese economy. Reuters reported that service-related consumer inflation remained subdued, suggesting that stronger commodity prices had not translated into a meaningful recovery in underlying domestic demand.

Market performance was mixed across sectors. Coal, defence, energy and shipping-related stocks advanced sharply as escalating tensions in the Middle East pushed oil prices higher and boosted demand for companies linked to commodities and transportation. Media and real estate stocks underperformed amid concerns over weak domestic activity.

In Hong Kong, technology stocks came under pressure, with the Hang Seng Tech Index declining 0.6%.

The cautious market mood also reflected concerns over China’s growth outlook. BofA Securities maintained its 2026 growth forecast for China at 4.5%, but cut its projections for 2027 and 2028 to 4.2% and 4.0%, respectively.

The revisions reflect expectations of continued headwinds to domestic economic activity and the possibility of delayed policy support. The outlook suggests that investors remain concerned that policymakers may be slow to introduce additional measures even as economic momentum weakens.

Overall, the latest data reinforced concerns that China’s recovery remains uneven, with higher commodity prices providing a temporary lift to headline inflation while weak domestic demand continues to weigh on the broader economy.

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