Asis report: Stocks mixed as oil rises, China inflation accelerates

(Sharecast News) - Asian stock markets were mixed on Wednesday as investors worried about future interest rate decisions as Brent crude topped the $100 mark, with price fears compounded by the latest inflation data out from China.

The Nikkei 225 and Hang Seng indices both fell 0.2%, the Sensex dropped 1.1% while the Shanghai Composite gained 0.3%. Over in Seoul, however, the KOSPI surged 1.4%, helped by decent gains from the heavyweight chip sector.

Brent was up a further 2.7% at $100.51 a barrel by the close in Asia, surpassing the $100 level for the first time since July, as markets reacted to the latest conflict in the Middle East. That included US military strikes on five Iranian oil tankers and Iran firing ballistic missiles into Jordan.

"Brent crude pushing above $100 a barrel has had a psychological effect on the market, pushing a hypothetical inflation worry gauge to 'serious' status and dragging down financial assets," said Dan Coatsworth, head of markets at AJ Bell.

"The oil price has now jumped by 28% since early August. This type of ascent could leave businesses and consumers feeling sick at the thought of sharp cost increases and potentially higher borrowing costs if central banks choose to fight inflation with interest rate hikes."

Inflationary concerns were also in focus after data from China's National Bureau of Statistics showed that both producer and consumer price inflation accelerated in August, driven by rising energy costs. PPI inflation rose to a year-on-year rate of 3.8% from 3.5%, coming in ahead of the 3.6% consensus forecast, while CPI inflation quickened to 0.8% from 0.5% as expected.

In equity news, South Korean heavyweights SK Hynix and Samsung Electronics helped the KOSPI index to outperform other regional indices on Wednesday, amid rising sentiment in the global semiconductor space.

Also in demand in Seoul were Hanwha Aerospace, as defence stocks were bolstered by the rising conflict in the Middle East, and shipbuilder Hanwha Ocean following a contract for the Royal Thai Navy frigate project.

Meanwhile, Lenovo was also a high riser in Hong Kong amid increasing optimism among AI-related plays.