Inflation data from China fueled economic concerns in global markets.
While inflation data announced in China increased the concerns about the global economy, Stock Exchanges started the day with a decline. In Asia this morning, decreases of more than 1 percent were recorded in the Hong Kong Hang Seng and China CSI 300 indices.
The news flow about the real estate sector in China also negatively affected the market perception. After more than a month, Fantasia stock fell more than 50 percent, while China Evergrande Group’s $3 bond has a $148.1 million coupon payment due today. The S&P 500 closed the day with losses for the first time after a 9-day rise of 0.35 percent on Tuesday, while US indices fell in futures. The Nasdaq 100 fell 0.71%, more than any other Wall Street index.
Tesla Inc. The loss of 199 billion dollars in company value was effective in this divergence. Before the critical US inflation data to be announced today, long-term US bonds gave back some of their gains. Previously, the US 30-year Treasury yield had fallen to its lowest level since July. Oil prices rose after it was understood that strategic oil reserves in the USA would not be activated immediately.
Inflation Pressure in China
China announced inflation data for October before the US. Accordingly, the country’s annual Consumer Price Index increase, which increased by 0.7 percent in September and is expected to rise by 1.7 percent in October, was at the level of 1.5 percent.
Producer Price Index in the country increased by 13.5% compared to the previous year. Thus, China’s producer inflation was at its highest level in 26 years.
Producer prices in China have soared in recent months, mainly due to the rise in global commodity prices and widespread nationwide power cuts.
