China Inflation Reports Confirm Ongoing Consumer Weakness, Stock Indexes Closed Down

Li Chen
10 Mar, 2025
Hong Kong

Market sentiment weakened in Monday's trading following the release of inflation reports.

The Hang Seng index declined 1.8%, and the mainland-focused CSI 300 index decreased 0.4% after two key inflation reports confirmed an ongoing economic slowdown and weak consumer spending. 

The consumer price inflation declined 0.7% from a year ago in February, according to a report released by the National Bureau of Statistics. 

Retail inflation reversed the 0.5% increase in the previous month and fell for the first time since January 2024.

Demand waned after the ending of the Spring festival amid a fall in prices for food and transportation. 

Core inflation, which excludes volatile food and energy prices, decreased 0.1%.

In addition, China's producer price deflation extended to the 29th consecutive month in February, and the measure of prices charged by manufacturers declined 2.2% from a year ago. 

Household spending has remained subdued because of several factors negatively impacting consumer sentiment—rising trade tensions with the U.S., the ending of rebates for household supplies and electric vehicles, front-loading by U.S. importers ahead of tariffs, and protracted recovery in the residential real estate market.

 

China Indexes and Markets 

The Hang Seng index dropped 1.8% to 23,801.87, and the mainland-focused CSI 300 index fell 0.4% to 3,928.77.

Technology and property stocks led the decliners for the second week in a row. 

Alibaba Group dropped 3.8% to HK $134.70, Meituan fell 4.8% to HK $174.80, and JD.com plunged 4.5% to HK $162.40.

China Vanke dropped 2.4% to HK $6.19, Longfor Group Holdings Ltd declined 1% to HK $10.82, and Sun Hung Kai Properties edged up 0.3% to HK $76.20.

Soundwill Holdings soared 40% to HK $7.70 after the company resumed trading for the first time since February 14. 

The company also announced its plans to go private in a transaction valued at HK $8.50 per share, and no competing offer is likely to emerge in the near future. 

Chifeng Jilong Gold Mining priced its public offering towards the bottom end of its filing range between HK$13.72 and HK$15.83 per share, and the company raised HK$2.68 billion, or $345 million.

The company said it plans to use half of the proceeds for upgrading its equipment and technology and the remaining to acquire high-quality mining assets.