APAC Market Wrap - 15 Sep
China Stock Market: At close, the Shanghai Composite fell 0.23%, the Shenzhen Component Index rose 0.63%, and the ChiNext Index gained 1.52%.
Sector-wise, gaming, pork, and automotive sectors led the gains, while precious metals and cultural media sectors saw the largest declines.
Hong Kong Stock Market: The three major Hong Kong indices posted collective gains. At close, the Hang Seng Index rose 0.22% to 26,446.56 points; the Tech Index gained 0.91% to 6,043.61 points; and the State-Owned Enterprises Index increased 0.21% to 9,384.76 points.
Market performance showed leadership from automotive, lithium battery, pharmaceutical, and gaming stocks, while gold, banking, and semiconductor stocks weakened.
Japan Stock Market: Market closed today.
South Korea Stock Market: The KOSPI index rose 0.35% to 3,407.31 points.
Leading sectors included healthcare management, oil and gas, and securities, while automotive, shipping, and aviation sectors lagged.
Australia Stock Market: The S&P/ASX 200 (XJO) fell 0.13% to 8,853.000 points.
Sectors like diversified financials, education, industrial distribution, and restaurants rose, while biotechnology, apparel, healthcare, and hardware saw slight declines.
Singapore Stock Market: The Straits Times Index dropped 0.13% to 4,338.36 points.
Sectors such as personalized services, chemicals, forestry products, and automotive parts saw slight gains, while healthcare services, travel and leisure, consumer packaged goods, and pharmaceutical manufacturers experienced larger declines.
Malaysia Stock Market: Market closed today.
Key Events
Australian Opposition Support Hits Historic Low, Governing Party Gains Edge
The latest polls show the support for Australia’s main opposition Liberal-National Party coalition has dropped to a historic low. According to Newspoll, the governing Labor Party has further widened its lead.
The poll reveals the opposition coalition’s primary vote has plummeted to a record low of 27%, giving Labor an absolute advantage of 58% to 42% in the two-party preferred vote.
The survey of 1,264 voters also shows Labor’s primary vote steady at 36%, indicating smaller parties and independents are benefiting from a trend of voters turning away from major parties.
Fed Expected to Cut Rates by 25 Basis Points This Week, Internal Divisions and Future Path in Focus
The market widely anticipates a 25-basis-point rate cut from the Federal Reserve this week, though significant internal disagreements on future rate adjustments have made the policy outlook a key focus.
Experts expect Fed Chair Jerome Powell to secure a narrow majority support from colleagues for a 25-basis-point cut at Wednesday’s meeting. However, internal debates within the Fed, along with uncertainties around inflation and the labor market, have made the subsequent policy direction a critical issue.
Korean Stocks Hit Record High as Government Drops Stock Investment Tax Hike Plan
Korean stocks rose to a record high on Monday after the government abandoned plans to raise capital gains taxes on stock investments. The benchmark KOSPI index marked its 10th consecutive trading day of gains. South Korea’s Finance Minister Chu Kyung-ho stated on Monday that the government would not adjust regulations on capital gains taxes for stock investments.
President Lee Jae-myung had indicated last week that there was no need to proceed with the planned revision to increase taxes on stock investors.
Insiders: US and South Korea Hold Follow-Up Talks on July Trade Deal This Friday
Insiders report that South Korea’s Minister of Trade, Industry and Energy Kim Jung-kwan met with US Commerce Secretary Gina Raimondo in New York on Friday local time for follow-up discussions on the trade deal reached in July.
Kim has been in the US this week to resolve differences over the deal’s details. Under the agreement, South Korea will invest $350 billion in the US in exchange for the US reducing “reciprocal” tariffs on South Korean goods from 25% to 15%.
An insider noted, “It’s not yet time to announce results.”
Institutional Views
Nomura: India’s Low Inflation Opens Room for Policy Easing, Forecasts Two Rate Cuts
Nomura Securities economists stated in a research report that India’s recent low inflation provides room for policy easing. The country’s August consumer price index rose 2.07% year-on-year, within the Reserve Bank of India’s 2%-6% target range. However, daily price data from the first two weeks of September suggest overall inflation could dip below 2.0%.
Economists added, “Beyond September data, the deflationary impact of GST adjustments warrants close attention.” Nomura expects the Reserve Bank of India to cut rates by 25 basis points each in October and December, bringing the terminal rate to 5.00% by the end of the 2026 fiscal year.
Goldman Sachs: Bank of Japan Likely to Hold Rates Steady This Week, Emphasizes Risk Management
Three members of Goldman Sachs’ economic research team stated in a report that the Bank of Japan may maintain its policy rate this week from a risk management perspective. They noted that while economic and price indicators released after the July meeting suggest a sustained virtuous cycle domestically, the impact of tariff hikes has recently begun to reflect in data.
The team added that Japanese exports and production have weakened, with the auto industry particularly soft and manufacturing profits declining. Goldman maintains its baseline forecast, predicting the next rate hike in January 2026.
Capital Economics: Indonesia May Loosen Fiscal Policy to Bolster Political Support
Capital Economics’ Senior Asia Economist Gareth Leather noted in a research report that there are signs the Indonesian government may ease fiscal policy to strengthen political support. He highlighted that recent protests underscore deep economic tensions.
Leather analyzed that newly appointed Finance Minister Sri Mulyani Indrawati has hinted at revisiting Indonesia’s 2026 budget draft, potentially scaling back planned reductions in regional transfer payments. “Although President Jokowi’s administration is still early in its term, the first year’s developments have raised significant questions about the country’s future,” he added.
JPMorgan: Fed to Cut Rates by 25 Basis Points This Week
JPMorgan US economist Michael Feroli predicts the Federal Reserve will cut rates by 25 basis points this week. He sees two or three dissenters favoring a larger cut but no support for maintaining rates. The dot plot is expected to still show one additional cut after 2025.
Barclays: Fed Rate Cut Certain, but Future Path Remains Uncertain
The market widely expects a 25-basis-point rate cut from the Fed this week, though post-decision guidance remains uncertain. Barclays Chief US Economist Marc Giannoni said that with inflation data remaining mild, the FOMC will judge that downside risks to achieving employment goals are rising.
He added that the Fed’s economic projections will show little change, but the dot plot will indicate three 25-basis-point cuts this year, one each in 2026 and 2027, with the long-term rate median held at 3.0%.
Bank of America: Emerging Markets May See Major Fund Inflows Early Next Year
Bank of America stated that as more signs emerge of resilience in emerging economies, emerging markets could see significant fund inflows early next year, driving further capital shifts from US assets. “Optimism will grow early next year as people confirm that trade tensions will have a limited impact on the economy.”
TD Securities: A Cautious Fed on Rate Cuts Could Lift Dollar
TD Securities strategists said in a report that if the Fed cuts rates by 25 basis points next week but adopts a cautious stance on further cuts, the dollar should rise. They noted that as concerns about economic growth become critical, market expectations lean toward consecutive cuts.
However, the Fed may temper these expectations, emphasizing potential inflation risks. “Powell could signal that the Fed is not on a predetermined rate-cut path and will continue monitoring upcoming data to assess risks.” This would boost the dollar. Still, they believe the dollar will decline long-term, with any rebound offering a good selling opportunity.