APAC Market Wrap - Oct 1
China Stock Market: Closed for holiday
Hong Kong Stock Market: Closed for holiday
Japan Stock Market: The Nikkei 225 fell 0.85% for the fourth consecutive session, closing at 44,550.85 yen, down 381.78 yen from the prior day.
Except for pharmaceuticals and other products, all 31 other sectors declined, with banking, real estate, securities/commodities futures, and other financials seeing the steepest drops.
South Korea Stock Market: The KOSPI rose 0.91% to 3,455.83 points.
Leisure equipment, semiconductor equipment, healthcare, and internet sectors led gains, while media, integrated facilities, and healthcare lagged.
Australia Stock Market: The S&P/ASX 200 edged down 0.04% to 8,845.70 points.
Aerospace, independent power, construction materials, and hardware rose, while homebuilding, real estate, software, and education saw slight declines.
Singapore Stock Market: The Straits Times Index gained 0.53% to 4,323.12 points.
Industrial products, healthcare services, and waste management surged, while credit, asset management, and steel posted larger losses.
Malaysia Stock Market: The FTSE Malaysia KLCI rose 0.56% to 1,620.87 points.
Healthcare, technology, and financial services gained, while commercial trusts, real estate investment, and transportation/logistics fell.
Key Events
U.S. Federal Government Enters Shutdown as Trump and Democrats Deadlock on Funding Bill
The U.S. Congress missed the midnight funding deadline, triggering the first government shutdown in nearly seven years, the third under President Donald Trump. The White House Budget Office ordered agencies to enact contingency plans for funding shortages, halting non-essential operations, suspending work for hundreds of thousands, and disrupting public services.
Bipartisan deadlock over healthcare subsidies, combined with 2026 midterm election posturing, may prolong the shutdown and its economic impact. Research suggests a three-week shutdown could push unemployment from August’s 4.3% to 4.6%-4.7%.
Singapore Private Home Prices Accelerate, Driven by New Buying Wave
Fueled by rebounding new project sales, Singapore’s private home prices posted their largest quarterly gain in three quarters. According to preliminary estimates from the Urban Redevelopment Authority (URA) on Wednesday, the private residential price index rose 1.2% in Q3, up from 1% in Q2.
Multiple new project launches in suburban and high-end central areas, coupled with lower local interest rates and developers’ buyer-friendly strategies, boosted demand. This surge complicates Singapore’s efforts to cool the housing market, with prices already among the world’s highest. The government’s latest measure, a July increase in seller stamp duty, aims to temper the market.
Foreign Capital Accelerates Exit from Indian Stocks, Nearing Record Outflows
Global investors are rapidly pulling out of Indian equities, setting the stage for potentially the largest annual foreign outflows on record. U.S. punitive tariffs, weak corporate earnings, and India’s status as one of the world’s priciest markets have soured sentiment.
By September 26, overseas funds withdrew a net $17 billion from Indian stocks this year, nearing 2022’s record. The trend continued this week, with provisional data showing $230 million in outflows on Monday alone.
South Korea’s Agri-Food Exports Break $10 Billion, Fastest Ever
Industry data released Wednesday showed South Korea’s food and agricultural exports surpassed $10 billion in record time. Per the Korea Agro-Fisheries & Food Trade Corporation, exports hit $10 billion by September 29, over two weeks earlier than last year.
The U.S. led destinations with $1.7 billion, up 15.3% year-over-year.
India Central Bank Holds Rates Despite U.S. Tariff Pressures
Despite low inflation and U.S. tariff pressures on the economy, the Reserve Bank of India (RBI) held its benchmark rate at 5.5% for the second consecutive meeting on Wednesday. In a survey of 39 economists, 24 predicted no change, while others expected a 25-basis-point cut.
The RBI maintained a neutral stance, preserving flexibility for future rate adjustments.
Institutional Views
CITIC Securities: In Dollar Rate-Cut Cycle, Focus on Hong Kong, A-Shares, and South Korea
CITIC Securities recommends focusing on Hong Kong, A-shares, and South Korean stocks for their higher elasticity in a dollar rate-cut cycle. For A-shares, evaluate fundamentals from a global exposure perspective, prioritizing resources, new productive forces, and overseas expansion.
Hong Kong’s mid-term earnings show structural improvement; track PMI for growth signals and focus on tech-driven sectors. South Korea’s market, backed by the Lee Jae-myung government and rising retail participation, is primed for revaluation. Key drivers include Corporate Law revisions and tax reforms, with the KOSPI potentially reaching 3,900 points, a 14.5% upside from current levels.
Morgan Stanley: Most Roadshow Clients Bullish on China, Eager to Boost Exposure
Morgan Stanley strategist Laura Wang said over 90% of clients at a recent U.S. roadshow expressed strong interest in increasing China exposure, the highest since early 2021’s market peak.
By August’s end, foreign long-only funds saw $1 billion in inflows to China, compared to $17 billion in outflows last year.