^{Photo: South China Morning Post}

Asian markets advanced on Wednesday, with investors closely analyzing China’s latest inflation data while also taking cues from strong overnight gains in the U.S. equity markets. The region’s performance was mixed, but overall sentiment leaned positive as traders positioned themselves ahead of key global economic releases.

China’s inflation data sets the tone

Fresh figures from the National Bureau of Statistics showed that China’s consumer price index (CPI) fell 0.4% year-on-year in August, a sharper decline than the expected 0.2% drop. The reading reinforced concerns over weak domestic demand and ongoing deflationary pressures.

At the same time, the producer price index (PPI) contracted 2.9% year-on-year, consistent with forecasts and marking an improvement from July’s 3.6% decline. Analysts noted that while PPI remains negative, the pace of easing suggests that China’s industrial deflation could be bottoming out.

Regional markets react

• Japan: The Nikkei 225 gained 0.23% while the Topix added 0.12%, supported by technology and industrial stocks.
• Hong Kong: The Hang Seng Index rose 0.4%, and the Hang Seng Tech Index climbed 0.59%. Alibaba shares extended their winning streak, rallying 2.89% to their highest level in nearly four years, buoyed by news of a $100 million funding round led by Alibaba Cloud for humanoid robotics firm X Square Robot.
• South Korea: The Kospi surged 1.42% to its strongest level since late 2021, while the Kosdaq added 0.53%. Data showed the unemployment rate edged up to 2.6% from July’s 2.5%, though investors largely shrugged off the increase.
• Australia: The S&P/ASX 200 traded nearly flat, up 0.13%, as gains in financial stocks offset weakness in miners.
• Indonesia: The Jakarta Composite Index rose 0.58% after three straight sessions of losses, rebounding from political uncertainty following President Prabowo Subianto’s dismissal of Finance Minister Sri Mulyani Indrawati. The rupiah also firmed 0.21% to 16,435 after sliding more than 1% the day before.
• Singapore: The Straits Times Index jumped 1% to a record high of 4,341.32, signaling continued investor confidence in the city-state’s stable growth outlook.

Tech stocks buoy sentiment after Apple launch

Asian technology firms tied to Apple saw gains after the company unveiled its latest iPhones, Apple Watches, and AirPods on Tuesday. Shares of Foxconn rose 1.67% in Taiwan, while Samsung Electronics advanced 1.82% in Seoul. However, Apple itself ended the previous session in the U.S. down 1.48%, as investors reacted cautiously to its product announcements.

U.S. markets set record highs

Optimism in Asia also reflected Wall Street’s upbeat performance. Overnight, all three major U.S. indices closed at record levels despite mixed economic data.

• The S&P 500 rose 0.27% to 6,512.61.
• The Nasdaq Composite gained 0.37% to finish at 21,879.49, hitting a fresh intraday record.
• The Dow Jones Industrial Average climbed 196.39 points, or 0.43%, to close at 45,711.34, driven by strong gains in UnitedHealth shares.

Looking ahead

Investors are now waiting for U.S. inflation updates, with the producer price index (PPI) due Wednesday and the consumer price index (CPI) scheduled for release Thursday. These reports will offer critical insight into whether the Federal Reserve could move forward with rate cuts, a factor that could shape global equity flows in the coming weeks.

Overall, Asian markets are balancing optimism from Wall Street with caution over China’s persistent deflationary challenges, leaving investors closely attuned to both regional developments and global monetary policy signals.