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Chinese Shares Gain as US Inflation Data Cools Rate Hike Expectations

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Chinese shares opened on a positive note on Thursday as US inflation data aligned with market forecasts, easing pressure on the US Federal Reserve to hike interest rates in the near term.

The Shanghai Composite Index, the main gauge of Chinese stocks, opened 0.3%, or 10.48 points higher, to 3,957.16. The Shenzhen Component Index added 0.8%, or 122.05 points, to 14,557.42.

Sentiment was bolstered by the latest US consumer price index report, which showed inflationary pressures continued to moderate in July.

Annual headline inflation slowed for the second straight month to 3.4% in July from 3.5% in June. On a month-over-month basis, the CPI edged up 0.1%, reversing the 0.4% decline the previous month.

"The market is still pricing a rate hike from the Fed, but we see the more likely course of action is for the Fed to hold rates steady for a prolonged period, well into 2027," ING Think economist James Knightley said in a note on Wednesday.

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