The Shangai Composite Index Closes 0.06% Higher

The Shanghai Composite fell 0.3% to 3,791 on Wednesday, while the Shenzhen Component was little changed to around 12,351, as investors weighed signs of a gradual recovery in consumer prices against mounting cost pressures for producers. China’s annual inflation rate edged up to 0.9% in September from 0.8% in August, below expectations of 1% but the highest since June. Producer price inflation accelerated to 5.0% from 3.8%, beating forecasts of 4.5% and marking the strongest rise since June 2022. Renewed hostilities in the Middle East and risks to global oil supplies have intensified price pressures, driving up input costs and squeezing margins as Chinese businesses struggle to pass higher expenses on to consumers. Investors now turn their attention to trade data due later today for further clues on the outlook for external demand. Notable decliners included Foxconn Industrial Internet (-1.4%), Zijin Mining Group (-1.1%), Zhongji Innolight (-2.3%) and Eoptolink Technology (-2.7%).

The Shangai Composite Index gained 2 points or 0.06 percent on Tuesday to close at 3800 points. Gains were led by Avic Aviation Engine (4.92%), Avic Shenyang Aircraft (4.10%) and Yonyou Soft (2.77%). Biggest losers were China Pacific Insu (-4.12%), Ping An Insurance (-3.06%) and China Life Insurance (-2.71%).

The Shanghai Composite edged up 0.10% to close at 3,800.9 on Tuesday, paring earlier losses, while the Shenzhen Component fell 0.25% to a more than one-year low of 12,353.7 as Wall Street’s tech selloff spilled over into Asian markets. Sentiment toward AI stocks has cooled as elevated borrowing costs prompt investors to reassess the returns on hefty capital investments. However, reports that CXMT made key advances in high-density chip design offered some support, highlighting China’s push to strengthen its position in a critical segment of the semiconductor industry. AI-related stocks were mixed, with Cambricon Technologies (0.47%) and Eoptolink Technology (0.66%) gaining, while SMIC (-0.64%), Zhongji Innolight (-0.31%) and NAURA Technology (-0.51%) declined. Investors are now turning their focus to upcoming quarterly earnings releases for clues on corporate margins and fundamental demand.