APAC Market Wrap - 18 Sep

 

China stock market: At close, the Shanghai Composite fell 1.15%, the Shenzhen Component dropped 1.06%, and the ChiNext Index declined 1.64%.

 

Tourism, CPO, and chip industry sectors led gains, while most sectors fell, with non-ferrous metals, large-cap financials, and rare earth magnets among the top losers.  

 

Hong Kong stock market: Hong Kong’s three major indices weakened. The Hang Seng Index fell 1.35% to 26,544.85 points, the Tech Index dropped 0.99% to 6,271.22 points, and the H-share Index declined 1.46% to 9,456.52 points.

 

Insurance, securities, banking, and gold stocks faced pressure, while some chip stocks rose against the trend.  

 

Japan stock market: The Nikkei 225 rebounded 1.15% to 45,303.43 points, up 513.05 points, breaking the 45,000 mark.

 

Electrical equipment, non-ferrous metals, metal products, pharmaceuticals, and wholesale were among the 16 rising sectors, while 17 sectors, including power and gas, aviation, land transport, and fisheries, declined.  

 

South Korea stock market: The KOSPI rose 1.40% to 3,461.30 points.

 

Electronics, household appliances, utilities, and semiconductors led gains, while non-ferrous metals, shipping, commercial services, and office electronics lagged.  

 

Australia stock market: The S&P/ASX 200 fell 0.83% to 8,745.20 points.

 

Semiconductors, credit, and diversified media rose, while oil and gas, industrial products, and diversified financials saw sharp declines.  

 

Singapore stock market: The Straits Times Index fell 0.26% to 4,312.62 points.

 

Diversified financials, furniture, and non-alcoholic beverages surged, while diversified media, interactive media, and insurance saw significant drops.  

 

Malaysia stock market: The FTSE Malaysia KLCI fell 0.79% to 1,598.93 points.

 

Technology, real estate, and energy rose, while closed-end funds, utilities, and financial services declined.  

Key Events  

Panasonic plans breakthrough EV battery within two years

 

Panasonic aims to develop a high-capacity battery within two years, potentially extending electric vehicle range as a Tesla supplier. The Japanese firm is working to eliminate anode structures in manufacturing to boost energy density, targeting “world-leading” capacity by the end of 2027.  

 

New Zealand GDP growth weakens  

 

New Zealand’s Q2 GDP shrank 0.9%, far exceeding economists’ 0.3% decline forecast, following a revised 0.9% growth in Q1. This has fueled speculation that the central bank may cut rates more aggressively than planned.  

 

South Korea’s President Lee stresses boosting stock market, vows to eliminate unfair trading  

 

President Lee Jae-myung emphasized the need to boost the stock market during a Thursday meeting with securities executives, pledging to eliminate unfair trading, opaque governance, and unreasonable decision-making to create a predictable, fair market.  

 

Kakao to raise 50 billion KRW for AI research  

 

Kakao plans to raise 50 billion KRW over five years to support AI research at four state-run institutes in Daejeon, Gwangju, Daegu, and Ulsan, fostering regional AI ecosystems.  

Institutional Views  

Fitch: Fed prioritizes jobs, may tolerate higher inflation short-term  

 

Fitch’s Olu Sonola said the Fed is fully focused on supporting the labor market, signaling a decisive 2025 rate-cut cycle, prioritizing growth and jobs even if it means tolerating higher inflation short-term.  

 

KPMG: Fed’s policy continuation into 2026 risks overstimulation  

 

KPMG’s Diane Swonk warned that extending current policies into 2026, amid Fed leadership changes, could lead to overstimulation, creating a harmful self-fulfilling prophecy of higher inflation expectations.  

 

BlackRock: Fed rate cuts hinge on sustained labor market weakness  

 

BlackRock’s Jean Boivin said Fed rate cuts likely depend on continued labor market weakness, noting Powell’s latest cut was “risk management” against worsening employment trends, making future actions data-dependent.  

 

Nomura: Adds October rate cut to Fed forecast  

 

Nomura now expects 25-basis-point Fed rate cuts at each remaining 2025 meeting after a dovish September cut, revising its earlier pause prediction for October. Despite dovish rate signals, economic projections were hawkish, lowering the bar for additional precautionary cuts.  

 

Deutsche Bank: Raises 2026 gold price forecast to $4,000  

 

Deutsche Bank raised its 2026 gold price forecast to $4,000 per ounce from $3,700, citing favorable forex and rate conditions. Official demand drives the premium, with silver forecasts raised to $45 per ounce from $40.  

 

Bank of America survey: 59% of European investors see U.S. labor weakness as top global growth risk  

 

A Bank of America survey showed 59% of European investors view U.S. labor market weakness as the biggest risk to global growth, with 33% citing Trump’s policy mix as the second-largest risk.  

 

CITIC Securities: Dollar may stay weak in rate-cut trade, gold to perform well  

 

CITIC Securities expects the Fed’s 25-basis-point September cut, aligned with market expectations, to keep the dollar weak. Powell’s risk-management cut prioritizes employment, with 50 more basis points expected in 2025. Gold is likely to perform strongly, with clearer 2026 rate paths pending the new Fed chair.