Chinese and Hong Kong equities retreated on Friday as a sharp rise in oil prices triggered fresh inflation concerns, overshadowing recent efforts to stabilize market sentiment.
The blue-chip CSI 300 Index and the Shanghai Composite Index both fell 1.2% by the lunch break, signaling that energy-driven cost pressures are weighing heavily on investor confidence.
The sell-off reflects a growing tension between policy support and macroeconomic headwinds.
While authorities have introduced measures to bolster the market, the surge in crude prices is reigniting fears that inflation could accelerate, potentially complicating the economic recovery outlook.
Investors are increasingly cautious about the impact of higher energy costs on corporate margins and consumer spending.
This development follows a period of volatility for Chinese equities.