APAC Market Wrap - 4 Jul
China: Markets surged early but closed lower, with mixed results for the major indices. At close, the Shanghai Composite rose 0.32%, the Shenzhen Component fell 0.25%, and the ChiNext Index dropped 0.36%. The Shanghai Index briefly rose over 1%, nearing 3,500 points.
Turnover across Shanghai and Shenzhen exchanges totaled 1.43 trillion yuan, up 118.8 billion from the previous day. Market sentiment was scattered, with more stocks declining than rising—over 4,100 stocks fell. Leading sectors included stablecoins, gaming, banking, and power, while solid-state batteries, beauty care, rare earth magnets, and non-ferrous metals saw the largest drops.
Hong Kong: All three major Hang Seng indices declined, with the Hang Seng Index down 0.64%, the Hang Seng Tech Index down 0.33%, and the State-owned Enterprises Index down 0.45%.
Sector-wise, tech stocks mostly retreated, internet healthcare showed mixed results, stablecoin concepts continued to gain, photovoltaic solar stocks rose across the board, semiconductor stocks advanced, and biotech stocks mostly strengthened.
Japan Stock Market: The Nikkei 225 index closed up 0.06% at 39,810.88 points. Sectors like power and gas, banking, and securities led gains, while shipping, non-ferrous metals, and steel sectors declined.
South Korea Stock Market: The KOSPI index closed down 1.99% at 3,054.27 points. Sectors such as gas, power, and other utilities, along with shipping, saw gains, while defense and securities sectors experienced significant drops.
Singapore Stock Market: The Straits Times Index fell 0.15%, closing at 4,013.62 points. Gaining sectors included agriculture, asset management, and packaging & containers, while medical equipment, forestry, and building materials saw notable declines.
Key Events
Samsung System Update Accidentally Leaks Triple-Fold Phone Design
With Samsung’s new product launch slated for next week, a system update may have offered a sneak peek at its rumored “triple-fold” phone.
According to Android Authority, which specializes in Android systems, the teardown of the One UI 8 update revealed animation hints possibly unveiling the new device’s design, folding mechanism, and camera setup.
Though labeled “Multifold 7” in the animations, it’s widely speculated the official name will be “Galaxy G Fold.” Samsung hinted at such a device during its January Unpacked event, with concept images matching the leaked animations.
Japan May Household Spending Far Exceeds Expectations: Robust Consumption or Inflation Crisis Unveiled?
As Japan’s heated Senate election campaign unfolds, the latest May household spending data, released Friday by the Ministry of Internal Affairs and Communications, could intensify the race.
Adjusted for inflation, May household spending rose 4.7% year-over-year, the largest increase since summer 2022, driven by higher auto expenditures. This far surpassed economists’ earlier estimate of 1.2% growth.
Ministry officials noted a significant rise in auto sales, rebounding from last year’s safety certification scandal, alongside increased domestic and international tourism spending and higher dining-out costs.
International Coffee Organization: Global ‘Coffee Shortage’ to Ease in Three Years, Prices Already Declining
On Thursday local time, Vanusia Nogueira, executive director of the International Coffee Organization (ICO), stated at an industry event in Brazil that global coffee supply is expected to improve within three years due to record-high prices spurring expanded plantation production.
Institutional Views
Citi: Tariff Deadline May Be ‘Irrelevant’ for G10 Forex, But Watch Japan
Citi forex strategists believe the upcoming July 9 tariff negotiation deadline is largely an “irrelevant event” for G10 forex markets.
For the EU, Citi’s base case predicts a framework agreement before July 9, extending the 10% tariff rate while talks continue. “Given the recent euro strength, they speculate this could slightly favor the euro, though it’s not a major driver as much good news is already priced in.”
On Japan, Citi sees a declining chance of an agreement due to Trump’s recent comments, stating, “The risk of Japan tariff hikes seems highest.” They forecast the USD/JPY to rise to 150 this summer, then fall below 140 later this year as the Bank of Japan normalizes policy, strengthening the yen.
Moody’s: Tariffs and Trade Uncertainty Increase Credit Risks in Asia-Pacific
Moody’s Ratings stated that tariffs and global trade uncertainty have raised credit risks in the Asia-Pacific region, downgrading the region’s sovereign credit outlook from stable to negative. Tariffs pose long-term credit risks to some Asia-Pacific economies, reducing their appeal and deterring foreign investment.