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

Mainland China and Hong Kong stocks saw declines on Thursday, as Middle East tensions reignited fears of higher oil prices and inflation. The Shanghai Composite index fell 0.4%, while Hong Kong's Hang Seng index dropped 1.3%. In Shanghai, the CSI300 index fell 0.4%, the Shenzhen index dropped 0.7%, and the tech-focused STAR50 index eased 0.4%.

Hong Kong's tech shares saw a steeper decline of 2.1%. This downward trend was driven by shipping attacks in response to the Iran conflict, which kept oil prices above $100 a barrel. Investors are also closely watching upcoming US inflation data, which could provide insights into the Federal Reserve's policy outlook and its effect on global markets.

The yield gap between US and Chinese 10-year Treasuries reached a record high, reflecting concerns that rising oil prices might spark inflation. Despite recent optimism among US companies in China, a survey showed confidence remained low due to political tensions, domestic competition, and economic slowdown. Meanwhile, Beijing's artificial intelligence startup DeepSeek has enlisted CITIC Securities to help prepare for an initial public offering on Shanghai's STAR Market.