China Deflation Worries Dominate Shanghai and Hong Kong Stock Trading

Li Chen
09 Jul, 2024
Hong Kong

China stocks were under pressure ahead of the release of several key economic indicators, including inflation updates, this week. 

The Hang Seng index and CSI 300 index struggled to get their footing amid market jitters before the release of closely watched inflation updates released by the statistics bureau on Wednesday. 

China's consumer price inflation is estimated to increase by at least 0.3%, and the producer price index decreased by 0.7% in June, according to a survey conducted by Ticker.com. 

Producer prices are likely to decline for the 21st month in a row as manufacturers struggle with overcapacity in several key industries and weak domestic demand. 

Later in the week, the National Bureau of Statistics is scheduled to release international trade, money supply, and foreign direct investment data. 

The Chinese economy is struggling amid weak consumer sentiment, sustained capital flight, and ongoing weakness in the property and job markets. 

Meanwhile, Chinese policymakers are scheduled to meet on Monday for the much-delayed third plenum, which could lead to the announcement of new economic reforms and market-supportive measures. 

Investors have lowered their expectations for deep and meaningful reforms that could stop the capital outflow and revive consumer sentiment. 

 

China Stock Movers 

The Hang Seng Index declined 0.3% to 17,478.72, and the CSI 300 index rose 0.1% to 3,406.16. 

Tingyi Holding decreased 3% to HK $9.83 after the maker of instant noodles raised prices on 12 products. 

Investors are worried that the price hike may backfire because of weak consumer demand amid high job market uncertainty. 

Anta Sports declined 2.7% to HK $69.55 after cautious comments from Citigroup raised the prospects of a lower stock price. 

Three new companies were listed on stock exchanges in China. 

Fangzhou Inc. increased to HK $4.82, and the online disease management platform priced its initial public offering at HK $4.50 per share. 

Baiwang Co. Ltd. increased a fraction to HK$36.05, and the enterprise software solution provider priced its initial public offering at HK$36 per share and raised HK$228.87 million. 

China Shenzhen International Warehouse Logistics Closed-end Infrastructure Fund, a real estate investment trust, priced its public offering and raised 1.2 billion yuan, or $160 million. 

China Shenzhen International traded at 2.45 yuan on the first day of its trading in Shenzhen.