Chinese equities registered declines on Wednesday, as the Shanghai Composite shed 0.88% to reach 3,767.2, marking its lowest level in approximately three months. The Shenzhen Component decreased by 1.97% to 12,110.6, a more than one-year trough. Investor sentiment diminished amid concerns regarding escalating production expenses potentially impacting corporate profitability, notwithstanding robust export demand.
China’s producer price inflation advanced to 5.0% from 3.8%, registering its largest gain since June 2022. Escalating tensions in the Middle East and potential disruptions to global oil supplies spurred input costs, compressing company margins. Consumer inflation also increased to 0.9% in September from 0.8% in August, attaining its highest level since June.
In September, China’s trade surplus expanded to $133.53 billion from $88.72 billion in the same period a year prior, representing the largest surplus since January 2025. Exports increased 36.3% year-on-year, reaching a peak of $447.18 billion, while imports advanced 31.0% to a record $313.66 billion, underscoring robust trade momentum.
Foxconn Industrial Internet registered a decline of 6.67%, while Zhongji Innolight decreased by 5.73%, CATL shed 3.11%, and China Life Insurance fell 2.85%. Broad-based apprehensions regarding escalating expenses and headwinds impacting corporate profitability exerted downward pressure on Chinese equities, counteracting the encouraging indications from robust trade data.