FX.co ★ China Stocks Rise as Consumer Inflation Turns Positive

On Wednesday, both the Shanghai Composite and the Shenzhen Component indices experienced gains, with the former rising by 0.4% to approximately 3,510 and the latter by 0.5% to 10,640. This upward movement in Chinese stocks comes as the markets react to crucial inflation data. Consumer prices in China increased by 0.1% year-on-year in June, marking their first positive shift in five months and suggesting a potential stabilization in consumer demand. Despite this, producer prices experienced a significant decline, dropping by 3.6%—the most pronounced decrease since July 2023—due to heightened price competition negatively impacting the industrial sector amidst soft domestic consumption. Additionally, geopolitical tensions persist, with Beijing cautioning Washington against the possibility of reimposing tariffs on Chinese goods in the upcoming month and threatening retaliatory measures against countries that support U.S. initiatives aimed at excluding China from global supply networks. Leading companies among those recording notable gains included Foxconn Industrial, which advanced by 1.2%, Contemporary Amperex with a 3.3% rise, and Zhongji Innolight, up by 1.6%.