Asia Pacific stocks opened the markets on a low note on Wednesday. Hong Kong’s Hang Seng index edged down after the release of China’s Consumer Price Index. Japan’s Nikkei 225 and Australia’s ASX 200 also declined. Mainland Chinese stocks such as Shanghai Composite and Shenzhen Component edged higher on Wednesday.
China’s Economic Outlook
The Hang Seng index retreated after weak Chinese economic data released by the National Bureau of Statistics of China. China Consumer Price Index (CPI) contracted by 0.2% MoM missing the estimated forecast of 0.1%. With the easing of the lockdown restrictions, many businesses reopened.
China’s Consumer Price Index rose to 1.3% YoY from last year’s 0.9%. However, this was weaker than the estimated forecast of a 1.6% increase. The country’s Producer Price Index (PPI) rose to 9.0% YoY from last year’s 6.8%. This was stronger than the 8.5% forecast and was the fastest growth rate since September 2008.
The Hang Seng index has been on a downtrend for six consecutive days. This has been the longest failing run since early October 2019. According to economic surveys in China, Hong Kong stocks fell after a rise in factory-gate price in China. This fueled concerns about further policy tightening.
Chinese oil giants advanced as crude oil futures remained above the US $70 per barrel level.
Tensions between the United States and China remain undeterred. This was after US President Joe Biden, signed an amend to withdraw the country’s investment in Chinese companies and some firms in the US which have ties to China’s military and surveillance technology.
The US Senate passed a legislation on Tuesday. The legislation supported Washington’s decision to heighten economic and political rivalry with China. China was reported to be preparing to pass an anti-sanctions law of its own. Competition between the two countries might be a slowdown in their economies.
Hang Seng Movers
Among the best performers in the Hang Seng index were oil companies such as CNOOC, China Petrol & Chemical Corp and Petro China. The oil giants largely advanced with gains in oil shares. The companies rose by more than 2% each. Other companies that boosted the index include China Mengiu Dairy and China Overseas.
Technological firms were the worst performers in the index after a decline in tech stocks. Alibaba Health Information Technology Ltd dragged the index with a 3.13% decline. Alibaba and Xiaomi slipped by 1.14% and 1.59% respectively.