China's October PPI Hits Record High, Stock Market Also Impacted... CSI 300 Down 1.4%

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Suhwan] China's Producer Price Index (PPI) has surged to the highest level since its inception, causing the Chinese stock market to continue its downward trend.

On the 10th, the CSI 300 index on the Shanghai Stock Exchange fell 1.4% compared to the previous trading day at 1:22 PM local time.

The CSI 300 index is China's representative stock index, comprising 300 large-cap stocks within the country.

Bloomberg reported, "Considering the decline today, it appears to be the largest drop since September 14."

According to the media, shares related to raw materials and consumer products in China fell more than 2.8%, dragging down the stock market.

Additionally, foreign investors have been selling Chinese stocks for four consecutive trading days. Bloomberg stated, "Foreigners sold Chinese stocks worth 8.7 billion yuan (approximately 1.6 trillion KRW), marking the longest consecutive selling streak since April."

This decline in the Chinese stock market came immediately after it was revealed that China's PPI recorded an all-time high last month.

The National Bureau of Statistics of China announced that the PPI in October rose 13.5% year-on-year. This is the highest increase in 25 years since statistics began in 1996. China's PPI has been setting new monthly growth records.

The sharp rise in PPI means that production costs in China's manufacturing industry have increased. This inevitably affects the prices of manufactured goods worldwide.

As it has been confirmed by statistics that Chinese prices are continuously rising, there is a forecast that the People's Bank of China will not lower the Loan Prime Rate (LPR), which functions as the benchmark interest rate.

Singapore-based investment bank UOB Kay Hian stated, "With the PPI higher than expected, it seems unlikely that the People's Bank of China will lower the LPR anytime soon," adding, "The combination of a slowdown in economic recovery and liquidity crisis in the real estate sector is also acting as a burden on the market."

This content was produced with the assistance of AI translation services.