Market Update
China's Industrial Overcapacity and Weak Demand
Li Chen
10 Sep, 2025
Hong Kong
China's benchmark indexes advanced on Wednesday as investors raised expectations for interest rate cuts following a steeper-than-expected decline in inflation.
The Hang Seng Index increased 1%, and the mainland-focused CSI 300 index edged up 0.2%, and the consumer price index fell more than expected in August.
China is struggling with an entrenched deflationary trend, as industrial oversupply and weak consumer demand keep prices in check. In addition, muted growth in exports limits businesses from clearing unsold inventories.
The Consumer Price Index in August declined 0.4% from a year ago, according to the latest data released by the National Bureau of Statistics on Wednesday.
The decline in inflation was the steepest in six months following a flat reading in July, driven by the largest fall in food prices in nearly four years.
The decline in food prices accelerated to 4.3% from 1.6% in July, with broad-based decreases across several categories.
Core inflation in August, which excludes volatile food and energy prices, increased 0.9% from a year ago.
In addition, the producer price index decreased 2.9% from a year ago in August, easing from July's 3.6% decline, according to a separate report released by the NBS.
Factory-gate prices in August declined for the 35th consecutive month of contraction, confirming that price pressures are likely to persist for several months with weak demand and persistent overcapacity.
China Indexes and Stocks
The Hang Seng Index increased 0.9% to 26,181.41, and the mainland-focused CSI 300 index rose 0.2% to 4,445.81.
Alibaba Group Holding increased 2.2% to HK$144.80, Meituan advanced 3.3% to HK$103.0, and Tencent Holdings gained 1.6% to HK$637.0.
Li Auto added 0.9% to HK$95.90, BYD edged up 0.4% to HK$97.0, and Xpeng Inc. advanced 0.9% to HK$81.55.
Jumbo-Sized Rate-Cut Expectations Lift Wall Street Indexes to New Record Highs
Barry Adams
09 Sep, 2025
New York City
Wall Street indexes advanced on Tuesday amid growing speculation that the Federal Reserve could deliver a larger-than-expected rate cut next week.
The S&P 500 index edged up 0.1%, and the Nasdaq Composite inched higher 0.2%, ahead of two key inflation reports this week.
Consumer price inflation is likely to accelerate to an annual pace of 2.9% in August from 2.7% in July, and producer price inflation is expected to be stable at 3.3%.
Rising inflationary pressures are likely to complicate policymakers' job amid deteriorating labor market conditions.
The Fed's dual mandate requires policymakers to raise rates when inflation is on the upswing but trim rates when the job market is weakening.
For now, investors are holding out for a rate cut of at least 25 basis points, and some traders are hoping that the Fed may choose to deliver a one-time 50 basis point rate cut.
U.S. Stock Movers
Fox Corp. Class A declined 4.8% to $59.50, and the company announced that the Murdoch family has resolved its dispute over the trust, with Lachlan Murdoch gaining control of the conservative media complex.
Three Murdoch children—Elisabeth, James, and Prudence—will receive $1.1 billion each and cease to be beneficiaries of the trust that has significant stakes in New Corp. and Fox Corp.
Fox Corp. is facing a $2.7 billion defamation lawsuit from voting technology company Smartmatic USA Corp.
News Corp. Class A decreased 4.5% to $28.60.
Dell Technologies decreased 0.8% to $122.01 after the company announced the resignation of chief executive officer Yvonne McGill, effective Tuesday.
David Kennedy, senior vice president of global operations, was named as the interim CFO.
Nebius Group NV jumped 54% to $98.85 after the artificial intelligence infrastructure provider signed a multi-year deal with Microsoft to provide cloud computing power for artificial intelligence-related queries.
Apple Inc. decreased 0.3% to $237.15 ahead of the company's releasing new versions of its devices, including a new iPhone.
Jumbo-Sized Rate-Cut Expectations Lift Wall Street Indexes to New Record Highs
Barry Adams
09 Sep, 2025
New York City
Wall Street indexes advanced on Tuesday amid growing speculation that the Federal Reserve could deliver a larger-than-expected rate cut next week.
The S&P 500 index edged up 0.1%, and the Nasdaq Composite inched higher 0.2%, ahead of two key inflation reports this week.
Consumer price inflation is likely to accelerate to an annual pace of 2.9% in August from 2.7% in July, and producer price inflation is expected to be stable at 3.3%.
Rising inflationary pressures are likely to complicate policymakers' job amid deteriorating labor market conditions.
The Fed's dual mandate requires policymakers to raise rates when inflation is on the upswing but trim rates when the job market is weakening.
For now, investors are holding out for a rate cut of at least 25 basis points, and some traders are hoping that the Fed may choose to deliver a one-time 50 basis point rate cut.
U.S. Stock Movers
Fox Corp. Class A declined 4.8% to $59.50, and the company announced that the Murdoch family has resolved its dispute over the trust, with Lachlan Murdoch gaining control of the conservative media complex.
Three Murdoch children—Elisabeth, James, and Prudence—will receive $1.1 billion each and cease to be beneficiaries of the trust that has significant stakes in New Corp. and Fox Corp.
Fox Corp. is facing a $2.7 billion defamation lawsuit from voting technology company Smartmatic USA Corp.
News Corp. Class A decreased 4.5% to $28.60.
Dell Technologies decreased 0.8% to $122.01 after the company announced the resignation of chief executive officer Yvonne McGill, effective Tuesday.
David Kennedy, senior vice president of global operations, was named as the interim CFO.
Nebius Group NV jumped 54% to $98.85 after the artificial intelligence infrastructure provider signed a multi-year deal with Microsoft to provide cloud computing power for artificial intelligence-related queries.
Apple Inc. decreased 0.3% to $237.15 ahead of the company's releasing new versions of its devices, including a new iPhone.
Tokyo Indexes Struggled After New Intraday Record Highs as Political Uncertainty Weighed
Akira Ito
09 Sep, 2025
Tokyo
Japan's market indexes struggled to hold on to the morning's gains after reaching new intraday highs.
The Nikkei 225 Stock Average declined 0.3%, and the broader Topix eased 0.5% as worries mounted about the political stability.
Japan's prime minister, Shigeru Ishiba, announced his resignation on Sunday amid rising discontent over his leadership following two election defeats.
Moreover, Japan's trade negotiations with the U.S. have stalled as Japan struggles to secure trade concessions from the Trump administration.
U.S. Commerce Secretary Howard Lutnick reiterated that Japan's pledge to invest $550 billion is essentially a "blank check" for the U.S. president.
Lutnick implied that Donald Trump will decide where and how Japan's $550 billion will be invested; however, Japan's trade negotiators or political leaders have neither confirmed nor agreed to it.
Moreover, the so-called U.S.-Japan trade deal is a verbal agreement lacking specifics on allocation, control, tax treatment, and repatriation rules.
Japan Indexes and Stocks
The Nikkei 225 Stock Average decreased 0.3% to 43,533.45, and the broader Topix fell 0.5% to 3,122.93.
Semiconductor equipment makers led market leaders in Tuesday's trading in Tokyo.
Tokyo Electron increased 1.9% to ¥20,985.0, Advantest Corp. gained 6.5% to ¥12,710.0, and Disco Corp. advanced 0.1% to ¥37,780.0.
Tokyo Indexes Struggled After New Intraday Record High as Political Uncertainty Weighed
Akira Ito
09 Sep, 2025
Tokyo
Japan's market indexes struggled to hold on to the morning's gains after reaching new intraday highs.
The Nikkei 225 Stock Average declined 0.3%, and the broader Topix eased 0.5% as worries mounted about the political stability.
Japan's prime minister, Shigeru Ishiba, announced his resignation on Sunday amid rising discontent over his leadership following two election defeats.
Moreover, Japan's trade negotiations with the U.S. have stalled as Japan struggles to secure trade concessions from the Trump administration.
U.S. Commerce Secretary Howard Lutnick reiterated that Japan's pledge to invest $550 billion is essentially a "blank check" for the U.S. president.
Lutnick implied that Donald Trump will decide where and how Japan's $550 billion will be invested; however, Japan's trade negotiators or political leaders have neither confirmed nor agreed to it.
Moreover, the so-called U.S.-Japan trade deal is a verbal agreement lacking specifics on allocation, control, tax treatment, and repatriation rules.
Japan Indexes and Stocks
The Nikkei 225 Stock Average decreased 0.3% to 43,533.45, and the broader Topix fell 0.5% to 3,122.93.
Semiconductor equipment makers led market leaders in Tuesday's trading in Tokyo.
Tokyo Electron increased 1.9% to ¥20,985.0, Advantest Corp. gained 6.5% to ¥12,710.0, and Disco Corp. advanced 0.1% to ¥37,780.0.
China Indexes Retained Upward Bias In Cautious Trading
Li Chen
09 Sep, 2025
Hong Kong
Benchmark indexes in China and Hong Kong advanced in cautious trading as investors looked forward to upcoming inflation data and rate actions in the U.S.
The Hang Seng Index advanced nearly 1%, and the mainland-focused CSI 300 index decreased 0.5% amid worries that policymakers may struggle to break the entrenched deflationary trend.
On Wednesday, the National Bureau of Statistics is set to release two separate inflation reports: producer prices and consumer prices.
In August, producer price inflation, a measure of wholesale price, is likely to show an annual decline of 2.9%, and consumer price inflation is likely to indicate easing of 0.2%.
China has set an annual economic growth target of 5% in 2025; however, the broader economy is facing multiple headwinds amid a sharp escalation in U.S. tariffs, persistent weakness in the residential property and labor markets, and faltering consumer confidence.
However, the central government is struggling to provide additional fiscal stimulus measures because policymakers are tackling rising government debt levels.
In a positive sign for the economy, China's goods exports are expected to register a growth of at least 4% in 2025, despite falling exports to the U.S.
But intense competition in the renewable energy, electric vehicle, and electric battery production has forced most companies to slash prices and forego profitability.
China Indexes and Stocks
The Hang Seng Index inched up 0.9% to 25,863.73, and the CSI 300 index fell 0.5% to 4,446.66.
Zijin Mining Group advanced 2.2% to HK$28.36, and the gold price reached a new high of $3,650 an ounce in New York trading.
Alibaba Group Holding advanced 2.6% to HK$141.0, Meituan dropped 1% to HK$99.90, and Tencent Holdings increased 0.7% to HK$623.50.
Dahon Tech (Shenzhen) Co. Ltd. soared 21% on the first day of trading on the Hong Kong Stock Exchange.
The bicycle maker priced its initial offering at HK$49.50 per share and sold 7.9 million shares in a global offering and raised HK$392 million.