Hang Seng, Taiwan Taiex slip as Middle East tensions push oil above $100. What investors need to watch next?

Hong Kong's Hang Seng index fell 0.17% to 25,274 amid rising crude oil prices and concerns over energy supply disruptions. Haidilao's shares dropped 9%, while Lenovo gained 2.1%. Analysts are cautious about China's outlook, with inflation data reflecting increased costs from energy and food. China's annual inflation rate rose to 0.8% in August from 0.5% in July. Producer prices also increased 3.8% year-on-year, accelerating from a 3.5% rise in July, partly driven by higher food and energy costs. International benchmark Brent crude surged past $100 per barrel for the first time in almost six weeks after attacks on oil facilities and ships in the Middle East threatened to further disrupt an already strained global supply chain. The US military reportedly struck five Iranian tankers in response to attempted missile attacks on a Navy warship, while attacks by an Iranian-backed Houthi rebel group ignited fires at oil facilities in Saudi Arabia. Crude oil prices have remained highly volatile since Israel and the United States initiated a war with Iran more than six months ago. The conflict has disrupted most shipping through the Strait of Hormuz, a narrow waterway through which around a fifth of the world's oil supply passed before the war began. Analysts at BofA Securities lowered their growth forecasts for China to 4.2% for 2027 and 4.0% for 2028, while retaining their 2026 growth forecast at 4.5%. Taiwanese equities have emerged as among the top performers in Asian markets in 2026, supported largely by strong gains in chip stocks. The impact of higher costs is also beginning to show up in economic data, with China's factory-gate inflation gathering pace in August, while consumer price growth accelerated, even as underlying domestic demand remained subdued. The US Federal Reserve's policy decision is expected to be closely watched by investors, with concerns over how policymakers could respond to rising energy costs and renewed inflationary pressures. Investors' attention has shifted to upcoming major central bank meetings, including the US Federal Reserve's policy decision, amid concerns over how policymakers could respond to rising energy costs and renewed inflationary pressures. Hong Kong-listed hotpot chain Haidilao slumped 9% after Bloomberg reported that its co-founder was selling 259 million shares through a family trust holding vehicle. Meanwhile, Lenovo rose 2.1%, MiniMax gained 1.9%, and Kingboard Laminates advanced 3.3%. The sharp rise in energy costs, driven by supply risks stemming from the Middle East conflict, is also making analysts increasingly cautious about the outlook for China. Taiwan's Taiex also ended 0.47% lower at 47,105 after retreating from its intraday highs, during which it touched a more than two-month high. The global supply chain is under strain due to the conflict, with oil prices surging past $100 per barrel for the first time in almost six weeks. The war between Israel and Iran has disrupted most shipping through the Strait of Hormuz, a narrow waterway through which around a fifth of the world's oil supply passed before the war began. The US military struck five Iranian tankers in response to attempted missile attacks on a Navy warship, while attacks by an Iranian-backed Houthi rebel group ignited fires at oil facilities in Saudi Arabia. The conflict has also led to a surge in Brent crude futures, which were last seen trading 2.57% higher at $100.44 a barrel, while US benchmark West Texas Intermediate crude jumped 2.03% to $94.92 a barrel. The US Federal Reserve's policy decision is expected to be closely watched by investors, with concerns over how policymakers could respond to rising energy costs and renewed inflationary pressures. Investors should check with certified experts before making any investment decisions.