APAC Market Wrap - 25 Aug

China Stock Market: The market oscillated upward throughout the day, with the Shanghai Composite Index approaching 3900 points, led by the ChiNext Index. By the close, the Shanghai Composite rose 1.51%, the Shenzhen Component Index gained 2.26%, and the ChiNext Index surged 3%.

Sector-wise, rare earth permanent magnets, baijiu, CPO, and communication equipment led the gains, while beauty care and a few other sectors saw declines.

Hong Kong Stock Market: The major Hong Kong indices closed higher. The Hang Seng Index rose 1.94% to 25,829.91 points; the Tech Index climbed 3.14% to 5,825.09 points; and the State-Owned Enterprises Index gained 1.85% to 9,248 points.

Market performance showed gold, automotive, non-ferrous metals, photovoltaic, and real estate stocks leading the gains.

Japan Stock Market: The Nikkei Average continued its upward trend, rising 0.41% to 42,807.82 yen, up 174.53 yen (with a trading volume of approximately 177 million shares).

By sector, 15 industries, including non-ferrous metals, wholesale, machinery, and services, saw gains, while 18 sectors, such as warehousing and transportation, electric power and gas, aviation, and fisheries and agriculture, declined.

South Korea Stock Market: The KOSPI rose 1.30% to 3,209.86 points.

Sector-wise, leisure equipment, trading companies, machinery, and electrical products led the gains, while internet directories, office electronics, utilities, and shipping companies saw the largest declines.

Australia Stock Market: The S&P/ASX 200 (XJO) edged up 0.06% to 8,972.400 points.

Sectors like credit, hardware, aerospace, and building materials saw slight gains, while restaurants, furniture, and biotechnology experienced minor declines.

Singapore Stock Market: The Straits Times Index rose 0.52% to 4,253.02 points.

By sector, credit, restaurants, and building materials saw modest gains, while industrial distribution, apparel and accessories, and cyclical retail posted larger declines.

Malaysia Stock Market: The FTSE Malaysia KLCI rose 0.31% to 1,602.45 points.

Sectors like technology, communications and media, and financial services saw slight gains, while industrials, healthcare, and real estate investment trusts declined.

Key Events

Thailand July Exports Exceed Expectations but Growth to Slow Due to Tariffs

The Thai Ministry of Commerce stated on Monday that while July export growth slowed, the export value exceeded expectations due to shippers accelerating deliveries before U.S. tariffs took effect.

However, Thailand’s export growth is expected to further decelerate in the second half of the year following the implementation of U.S. tariffs.

Singapore Monetary Authority May Shift to Easing Policy; Experts Say Cooling Core Inflation Signals Potential October Loosening

Josh Gilbert, a market analyst at eToro, noted in an email that with the Consumer Price Index (CPI) continuing its inflation-cooling trend in July, the Monetary Authority of Singapore (MAS) may ease monetary policy.

July’s core inflation rose 0.5% month-on-month, down from June’s 0.6%. Gilbert believes that given the cooling core inflation and potential economic slowdown in the second half, further easing by the MAS in October “seems like the right move.”

Japan Finance Minister Kato Katsunobu: Crypto Assets Can Be Part of Diversified Investments

At an event in Tokyo, Japan Finance Minister Kato Katsunobu stated that crypto assets can form part of a diversified investment portfolio.

He noted the growing user base for crypto assets and pledged to work on creating a suitable trading environment. Kato added, “While crypto assets carry high volatility risks, with the right investment framework, they can become part of a diversified portfolio.”

Institutional Views

Goldman Sachs: Hedge Funds Net Buy Chinese Stocks at Fastest Pace in 7 Weeks

A Goldman Sachs report dated August 22, based on institutional brokerage data, shows hedge funds net bought Chinese stocks at the fastest pace in seven weeks, with both long positions and short covering. China is currently the most net-bought market in institutional brokerage business since August.

Morgan Stanley’s Chief China Equity Strategist Wang Ying, in a recent research note, attributed the A-share rally to improved liquidity, with funds shifting from bonds and deposits to stocks. Unlike previous brief surges, onshore long-term bond yields have risen steadily since June, indicating a more positive investor outlook on the long-term macroeconomy.

Barclays, Societe Generale Shift to Predicting Fed September Rate Cut

Barclays and Societe Generale now expect the Federal Reserve to cut rates by 25 basis points in September, citing a shift in Fed Chair Powell’s stance on rising employment risks at the Jackson Hole symposium.

Barclays now anticipates two 25-basis-point cuts in September and December, noting Powell’s speech introduced a “easing bias,” raising the bar for not cutting rates.

HSBC: Raises Year-End Shanghai Index Target to 4000, Citing Ample Liquidity

HSBC Research raised its forecast for the A-share market’s year-end index targets for 2025, citing abundant domestic liquidity driving the current rally.

The bank sees a potential upside of 5% to 7%, lifting the Shanghai Composite target from 3,700 to 4,000 points, the CSI 300 from 4,300 to 4,600 points, and the Shenzhen Component Index from 11,500 to 13,000 points.

Guosheng Securities: Asia Metallurgical Coal Market Expected to Recover in Q3

Guosheng Securities predicts a continued recovery in the Asia metallurgical coal market in Q3 2025. According to S&P Global Platts on August 16, despite supply pressures from adverse weather and mine safety issues in Australia, post-monsoon restocking in India and a potential rebound in China’s domestic market could support a recovery in the Asia seaborne metallurgical coal market in Q3 2025.