APAC Market Wrap - Oct 2
China Stock Market: Closed for holiday
Hong Kong Stock Market: Hong Kong's major indices closed higher today, with the Tech Index surging over 3%, hitting its highest level since November 2021. At the close, the Hang Seng Index rose 1.61% to 27,287.12 points; the Tech Index climbed 3.36% to 6,682.86 points; and the Hang Seng China Enterprises Index gained 1.77% to 9,724.38 points.
From the market performance, semiconductors, gold, consumer electronics, solar, pharmaceuticals, and auto stocks led the gains.
Japan Stock Market: The Nikkei 225 rebounded 0.87% after five consecutive days of declines, closing at 44,936.73 yen, up 385.88 yen.
By sector, 16 industries, including pharmaceuticals, nonferrous metals, precision instruments, and metal products, saw gains, while 17 industries, such as electricity and gas, services, air transportation, and real estate, declined.
South Korea Stock Market: The KOSPI surged 2.70% to 3,549.21 points.
Electrical products, conglomerates, semiconductors, other financials, and oil and gas led gains, while integrated utilities, food, interactive media, and gaming entertainment lagged.
Australia Stock Market: The S&P/ASX 200 rose 1.13% to 8,945.90 points.
Aerospace, independent power, construction materials, and hardware sectors gained, 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.
Semiconductors, biotechnology, and industrial products surged, while aerospace, diversified media, and interactive media saw larger declines.
Malaysia Stock Market: The FTSE Malaysia KLCI rose 1.04% to 1,637.80 points.
Technology, healthcare, and utilities gained, with almost no sectors declining.
Key Events
Trump Urges Republicans to Seize Shutdown Opportunity
Trump posted on social media that Republicans must use the Democrats’ forced government shutdown to eliminate unnecessary personnel and curb waste and fraud, potentially saving billions of dollars.
South Korea May Announce U.S. Security Pact Before Trade Deal
South Korea’s Foreign Ministry said that, given slow progress in trade talks, Seoul may announce a new security agreement with the U.S. before concluding trade negotiations.
Foreign Minister Cho Hyun said Seoul, in coordination with Washington, is considering advancing the defense portion of talks. The ministry confirmed his remarks to Bloomberg.
Japan Bond Market Sees Largest Outflow in a Year
Preliminary data from Japan’s Ministry of Finance on Thursday showed global investors sold ¥2 trillion in Japanese bonds last week, the highest since September 2024.
Overseas funds also sold ¥963.3 billion in Japanese stocks over the past two weeks, following ¥378 billion in the prior two weeks. Japanese investors offloaded ¥162 billion in foreign bonds and ¥11.6 billion in foreign stocks.
Historic First! Musk’s Net Worth Breaks $500 Billion, Solidifying Top Spot
On Wednesday, global richest person Elon Musk’s wealth surpassed $500 billion, becoming the first to cross this threshold, driven by Tesla’s stock rebound and soaring valuations of his other startups.
Per Forbes’ billionaire list, Musk’s net worth hit $500.1 billion as of 4:15 p.m. ET but later dipped slightly below $500 billion.
Institutional Views
Barclays: Japan-U.S. Investment Deal May Widen USD/JPY Basis Spread
Barclays noted that a $550 billion Japan-U.S. investment agreement may widen the USD/JPY currency basis spread rather than weaken the yen. Strategists Lhamsuren Sharavdemberel and Shinichiro Kadota wrote that the scale of potential capital inflows will be key.
If financed via cross-currency swaps rather than foreign bond issuance or forex deposits, private banks’ foreign-currency loans will drive the USD/JPY basis spread wider.
Morgan Stanley: Growing Investor Interest in Chinese Stocks
Morgan Stanley’s chief China equity strategist Laura Wang said global investor interest in Chinese stocks is rising as corporate earnings stabilize and tech sector upside grows. In a media interview, Wang noted U.S. investors’ interest is particularly noteworthy, as “their enthusiasm has been slower to build.”
She said over 90% of U.S. investors she met on a recent trip plan to increase China stock exposure, excited by Chinese firms’ tech and innovation capabilities, especially in “humanoid robots, automation, and biotech.”
Institution: RBA Needs Another Rate Cut in November
Indeed’s economist Callam Pickering said: “Australian household spending growth was weak in August at just 0.1%, but current spending levels remain well above last year.” Despite the weak August figure, June and July saw solid growth.