Stocks in China and Hong Kong fell Wednesday as China’s consumer prices slipped into negative territory in July, for the first time in 28 months.
The CSI300, which tracks stocks of the largest listed companies in Shanghai and Shenzhen, fell 0.31%.
Mainland Chinese markets were lower, with the Shanghai Composite closing 0.49% down at 3,244.49 and extending its losing streak to three days.
The Shenzhen Component lost 0.53% to close at 11,039.45, and Hong Kong’s Hang Seng index was hovering above the flatline in its final hour of trade.
China’s July CPI declined by 0.3% year-on-year, smaller than the 0.4% expected by economists polled by Reuters — the last time China recorded a fall in its inflation rate was in February 2021.
Its producer price index fell 4.4% in July compared to a year ago, more than the 4.1% expected by economists polled by Reuters.
“These numbers will deepen worries about both China’s growth prospects and the effectiveness of traditional stimulus measures,” Mohamed El-Erian, chief economic advisor of Allianz, said in a post on X, formerly known as Twitter.
Major markets in Asia-Pacific were mixed.
Japan’s Nikkei 225 slid 0.53% and closed at 32,204.33, while the Topix fell 0.4% to end at 2,282.57.
Meanwhile, South Korea’s Kospi closed 1.2% up at 2,605.12 to snap a five-day losing streak, while the Kosdaq was up 1.86% to finish at 908.98. Australia’s S&P/ASX 200 was also higher, gaining 0.37% to end at 7,338.
Overnight in the U.S., all three major indexes saw a selloff after Moody’s downgraded the credit rating on several regional banks, citing deposit risk, a potential recession and struggling commercial real estate portfolios.
The Dow Jones Industrial Average was down 0.45%, while the S&P 500 dipped 0.42% and the Nasdaq Composite pulled back by 0.79%.
