China's economic indicators released on Friday revealed persistent deflationary pressures, despite some signs of stabilization in the world's second-largest economy. The National Bureau of Statistics reported that the consumer price index (CPI) for September remained unchanged from a year earlier, missing the anticipated 0.2% gain. This flat CPI follows a modest 0.1% increase in August. On the other hand, the producer price index (PPI) saw a decline of 2.5% year-on-year, slightly more than the expected 2.4% drop but marking the narrowest decline since March. Notably, food prices, a significant component of China's CPI, fell by 3.2% year-on-year in September, with pork prices, a staple in Chinese diets, plummeting by 22%. This data underscores the challenges China faces in its economic recovery, particularly with the ongoing property sector slowdown impacting consumer confidence and household demand.
The stock market's reaction to China's economic data has been notably cautious. Hong Kong's Hang Seng Index and Hang Seng China Enterprises Index (HSCEI) both experienced declines, reflecting investor concerns about the strength and sustainability of China's economic recovery. The deflationary pressures, coupled with the ongoing debt crises in some of China's largest real estate developers, have further dented investor and consumer confidence. While there are emerging signs of stabilization in certain sectors, the broader outlook remains uncertain.
Start investing today or test a free demo
Open real account TRY DEMO Download mobile app Download mobile app
The Hang Seng China Enterprises Index (HSCEI) recorded declines of 2.30% today. On the chart we see a long-term symmetrical triangle formation. According to theory, such a formation foreshadows a continuation of the earlier movement, especially given the declining volume over the past months. As soon as the price breaks out below, it is worth watching the volume, which should rise again to higher levels for confirmation.
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
