APAC Market Wrap - 10 Jul
China: Markets rallied in the afternoon but pulled back, with major indices posting modest gains. The Shanghai Composite Index rose 0.48%, reclaiming above 3,500 points, while the Shenzhen Component Index gained 0.47%, and the ChiNext Index edged up 0.22%. Sector-wise, silicon energy, real estate, rare earth permanent magnets, and diversified finance led the gains, while PCB, consumer electronics, gaming, and military sectors saw declines.
Hong Kong: The major indices showed mixed results. The Hang Seng Index rose 0.57%, the Hang Seng Tech Index fell 0.29%, and the State-Owned Enterprises Index climbed 0.83%. Sector performance varied, with tech stocks declining, apple concept stocks strengthening, building material stocks rising, and securities, brokerage, property management, and cryptocurrency concept stocks, along with ETFs, continuing their upward trend.
Japan Stock Market: The Nikkei 225 Index closed down 0.4% at 39,646.36 points, dragged by electronics and retail stocks. Seven sectors, including securities, commodity futures, precision equipment, and construction, posted gains, while 26 sectors, such as electric power, other products, oil and coal, and shipping, declined.
South Korea Stock Market: The KOSPI rose 1.6%, closing at 3,183.23 points. Pharmaceuticals and airlines led the gains, while household appliances and tobacco sectors lagged.
Australia Stock Market: The S&P/ASX 200 (XJO) increased 0.56%, ending at 8,589.200 points. Semiconductors, agriculture, and aerospace sectors saw strong gains, while industrial distribution, restaurants, and credit sectors underperformed.
Singapore Stock Market: The Straits Times Index rose 0.41%, closing at 4,074.47 points. Forestry products, insurance, and construction sectors topped the gains, while apparel, packaging, medical services, and industrial products saw losses.
Malaysia Stock Market: The Malaysia Index gained 0.48%, closing at 1,536.52 points. Business trusts and construction led the rise, with plantations and real estate investment trusts declining.
Key Events
Bank of Japan: U.S. Tariffs Have Limited Impact on Exports So Far
The Bank of Japan stated Thursday that the recent U.S. tariff hikes have a limited overall effect on Japan’s domestic output and exports.
According to the quarterly meeting summary from regional branch managers, some firms have delayed or reassessed capital expenditure plans, while others have boosted spending to streamline operations and address labor shortages. The bank noted that the overall impact on exports and industrial output remains manageable.
South Korea Central Bank Holds Steady, Keeps Rate at 2.5% Amid Housing and Tariff Concerns
The Bank of Korea held its benchmark rate steady at 2.5% on Thursday, aligning with the consensus of 19 surveyed economists, as it monitors the effects of prior easing policies.
This decision comes amid soaring apartment prices in Seoul and uncertainties from U.S. tariff threats. The bank aims to maintain monetary easing while watching for financial imbalances.
Australia’s Central Bank Faces Pressure for Voting Transparency Reform
The Reserve Bank of Australia’s Monetary Policy Committee may be forced to disclose the individual voting positions of its nine members at each meeting, breaking from its anonymous decision-making tradition.
Despite expectations of a rate cut, six members voted against it this week, sparking public calls for transparency. If the August meeting holds rates steady, controversy over this “impersonal” policy could intensify, fueling broader societal debate given Australians’ keen interest in rate dynamics.
Institutional Views
JPMorgan: Trump’s New Tariffs to Push U.S. Average Rate to 14.6%
JPMorgan economists Michael Feroli and Abel Reinhart estimate that Trump’s latest tariffs, effective August 1 on 14 nations, will raise the U.S. average tariff rate from 13.4% to 14.6%. Separately, Commerzbank analysts suggest it could exceed 18%.
Citi: Window for Copper Exports to U.S. May Close in 2025
Citi analysts warn that Trump’s tariffs mark a turning point for copper, potentially shutting the export window to the U.S. for the rest of 2025. They predict declining imports and collapsing demand as inventories shrink.
Barclays: High Tariffs Could Drive U.S. Drug Price Hikes and Shortages
Barclays analysts note that U.S. plans for up to 200% tariffs on drugs could severely impact the pharma industry long-term, raising costs, squeezing profits, and disrupting supply chains. This may lead to shortages and higher consumer prices, though a year-and-a-half transition period offers some relief.
CITIC Securities: Global Capital Rebalancing, U.S. Stock Outflows Persist
CITIC Securities reports a drop in global risk appetite, with funds flowing into U.S. fixed-income funds and out of U.S. and Japanese equity funds, while European stocks see net inflows.
Among mutual funds, long-duration bond and tech stock funds lead, while QDII funds show inflows into Hong Kong tech and pharma, with U.S. products facing outflows.
The rebalancing trend continues, with Europe seeing clear net inflows and U.S. stocks under pressure.