China stocks rise after inflation data

The Shanghai Composite rose 0.13% to 3,812 and the Shenzhen Component gained 0.38% to 12,558 on Wednesday, rebounding from the previous session’s pullback as investors digested the latest inflation figures.

Data showed consumer prices declined 0.4% year-on-year in August, the steepest fall in six months, while producer prices dropped 2.9%, moderating from July’s 3.6% decline but still marking the 35th consecutive month of factory-gate deflation.

The numbers reinforced concerns over sluggish domestic demand and persistent disinflationary pressures, offering little clarity on the trajectory for growth or the timing of additional stimulus from Beijing.

Still, Chinese equities hovered near multi-year highs, underpinned by strong northbound fund inflows and continued participation from retail and institutional investors, reflecting confidence in the market’s medium-term resilience. Gains in technology and consumer-linked shares provided further support.

On the corporate front, Apple’s unveiling of its latest lineup of iPhones, Apple Watches, and AirPods fueled a rally in its supply chain partners. Foxconn Industrial led the charge, soaring 10%, while Victory Giant surged 12%.

Other notable winners included Eoptolink Technology, up 6.2%, and Zhongji Innolight, which advanced 7.2%, as optimism around new product cycles boosted sentiment across the electronics sector.

Looking ahead, investors are expected to closely track upcoming trade and credit data releases for further clues on the health of China’s economy, alongside any policy signals from the People’s Bank of China as it balances growth support with financial stability.