China, Hong Kong stocks track regional peers lower on oil-driven inflation fears

SHANGHAI: Mainland China and Hong Kong stocks slipped on Thursday, as escalating Middle East tensions rekindled concerns over higher oil prices and inflationary pressures. At the midday break, the benchmark Shanghai Composite index dropped 0. 4%, while the blue-chip CSI300 index also lost 0. 4%. The smaller Shenzhen index was down 0. 7%, the startup board ChiNext Composite index fell 0. 2% and Shanghai’s tech-focused STAR50 index eased 0. 4%. In Hong Kong, the benchmark Hang Seng index fell 1. 3%, while the city’s tech shares dropped 2. 1%. Asian stocks slid as the biggest wave of attacks on shipping in the war with Iran kept oil prices above $100 a barrel. Meanwhile, traders and analysts are anxiously awaiting US inflation data due later this week, seeking fresh clues on the Federal Reserve’s policy outlook and its potential impact on global financial markets. “September FOMC decision remains a close call as investors await US CPI release, ” analysts at OCBC Bank said in a note. The yield premium of the 10-year US Treasury over its Chinese counterpart widened to the highest level on record, driven by a surge in US yields amid worries that rising oil prices could fuel inflation. US companies in China have grown more optimistic about their business prospects after confidence hit a record low last year amid political tensions, intense domestic competition and slowing economic growth, a survey showed on Thursday. Separately, Chinese artificial intelligence startup DeepSeek has tapped CITIC Securities to prepare for an initial public offering on Shanghai’s tech-focused STAR Market, sources told Reuters.

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