Lale Akoner, global market strategist for etoro, says: “We think China’s inflation rebound says more about rising global costs than a recovery in its economy. Higher oil, food, metals and chip prices pushed up consumer and factory-gate inflation in August. Households are still spending cautiously, making it difficult for companies to pass those costs on.
 
“This is a difficult backdrop for businesses. Exporters and manufacturers may have to absorb more of the increase, squeezing profits if oil stays near $100 and chip shortages continue. Electronics and appliance makers look particularly exposed, while energy and commodity producers should benefit.
 
“For investors, China’s stock market is likely to become more divided. Companies able to raise prices, or those benefiting from expensive commodities, could outperform, while cost-sensitive manufacturers may struggle. The inflation rise could also make rapid interest-rate cuts less likely. Unless price rises spread to wages and services, we expect Beijing to keep supporting the economy, while remaining cautious about adding to inflation.”


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