FX.co ★ China Stocks Struggle for Direction

The Shanghai Composite Index slipped 0.3% to 3,791 on Wednesday, while the Shenzhen Component was little changed 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 inched up to 0.9% in September from 0.8% in August, missing market expectations of 1% but still reaching its highest level since June. At the same time, producer price inflation accelerated to 5.0% from 3.8%, surpassing forecasts of 4.5% and marking the sharpest increase since June 2022.

Renewed hostilities in the Middle East and heightened risks to global oil supplies have intensified price pressures, pushing up input costs and squeezing profit margins, as many Chinese firms struggle to pass higher expenses on to consumers. Investors are now looking ahead to trade data due later today for further insight into the outlook for external demand.

Among notable decliners were Foxconn Industrial Internet (-1.4%), Zijin Mining Group (-1.1%), Zhongji Innolight (-2.3%) and Eoptolink Technology (-2.7%).