Chinese stocks track regional peers lower on oil-driven inflation fears

China's main stock market and its Hong Kong counterpart both declined on Thursday as fears of higher oil prices and inflation grew following heightened Middle East tensions. The Shanghai Composite index fell 0.4%, the CSI300 index dropped 0.4%, while the Shenzhen index slipped 0.7%. The ChiNext Composite index fell 0.2% and the STAR50 index slid 0.4%.

In Hong Kong, the Hang Seng index tumbled 1.3%, with tech shares down 2.1%. Oil prices hovered above $100 a barrel due to a surge in attacks on shipping in the ongoing conflict with Iran. Traders and analysts are watching for U.S. inflation data due later in the week, keenly searching for hints about the Federal Reserve's policy stance and possible repercussions on global markets.

The yield gap between U.S. and Chinese 10-year Treasuries surged to a record high, reflecting rising U.S. interest rates amid concerns that spiking oil prices could spark inflation. A recent survey indicated Chinese companies in China are feeling more confident about their business outlook, after confidence levels sank last year due to political strife, fierce competition, and economic contraction.

Meanwhile, Chinese artificial intelligence firm DeepSeek has enlisted CITIC Securities to help it prepare for an initial public offering on Shanghai's STAR Market.