APAC Market Wrap - Oct 14
China Stock Market: The market experienced volatile adjustments throughout the day, with the ChiNext Index and STAR 50 Index both dropping over 4% intraday.
At the close, the Shanghai Composite fell 0.62%, the Shenzhen Component dropped 2.54%, and the ChiNext Index slumped 3.99%. By sector, insurance, coal, banking, and port shipping led gains, while semiconductors and CPO saw the steepest declines.
Hong Kong Stock Market: Hong Kong’s three major indices weakened collectively. At the close, the Hang Seng Index fell 1.73% to 25,441.35 points, the Tech Index dropped 3.62% to 5,923.26 points, and the H-share Index declined 1.55% to 9,079.16 points.
Banks, insurance, and solar stocks led gains, while pharmaceuticals, gold, and semiconductors saw corrections.
Japan Stock Market: The Nikkei 225 extended its sharp decline, falling 2.58% (1,241.48 yen) to 46,847.32 yen (with ~2.81 billion shares traded), dropping below 47,000 yen.
By industry, shipping, retail, steel, and food rose, while 29 sectors, including electrical equipment, nonferrous metals, securities & commodities futures, and rubber products, fell.
South Korea Stock Market: The KOSPI fell 0.63%. By sector, non-metallic minerals, electrical products, life insurance, and utilities surged, while display panels, aerospace, and internet stocks declined.
Australia Stock Market: The S&P/ASX 200 rose 0.19% to 8,899.40 points.
Diversified financials, industrial distribution, and metals & mining saw modest gains, while alcoholic beverages, aerospace, medical services, and semiconductors posted larger declines.
Singapore Stock Market: The Straits Times Index fell 0.84% to 4,389.84 points.
Other energy, industrial products, and metals & mining saw slight gains, while aerospace, home construction, medical distribution, and semiconductors saw significant losses.
Malaysia Stock Market: The FTSE Malaysia KLCI fell 0.23% to 1,611.46 points.
Consumer goods, communications & media, and closed-end funds rose, while technology, commercial trusts, and utilities declined.
Key Events
Japan Faces Potential Black Swan! Coalition Collapse Fuels Trade Tensions and Market Worries
Japanese financial assets faced selling pressure on Tuesday. After Japan’s Komeito Party announced its exit from the LDP coalition last Friday, tensions in Japan’s capital markets persisted this week.
Analysts say the coalition collapse was unexpected and could trigger a “black swan” event—an opposition coalition might form, preventing new LDP leader Sanae Takaichi from becoming prime minister.
Seoul’s Overheated Housing Market May Delay Rate Cuts; Economists Expect Bank of Korea to Hold Steady
By September’s end, Seoul apartment prices rose for the 35th consecutive week, with gains accelerating despite government measures to curb demand. This poses challenges for the Bank of Korea, which kept rates unchanged in its last two meetings due to financial stability risks tied to real estate.
Morgan Stanley’s chief Korea economist Kathleen Oh said the bank expects the BOK to pause rate cuts in October and resume in November, differing from earlier views of action this month.
Despite little change in fundamentals since August, the housing rebound suggests policymakers will wait to assess new housing measures.
Japan’s “Crypto Reserve Pioneer” Stock Plunges, Enterprise Value Falls Below Bitcoin Holdings
Japanese listed company Metaplanet Inc.’s enterprise value fell below the value of its Bitcoin reserves for the first time, reflecting waning global investor interest in “digital asset reserve companies.”
Metaplanet, originally a hotel business, pivoted to Bitcoin holdings in April 2024, when markets priced its stock at a premium over its Bitcoin net asset value (NAV).
Samsung Electronics Reclaims Global Memory Chip Sales Crown in Q3
Tuesday data showed Samsung Electronics regained the top spot in global memory chip sales from SK Hynix in Q3.
Per Counterpoint Research, Samsung’s memory chip sales (DRAM and NAND flash) reached $19.4 billion in Q3, up 25% QoQ, while SK Hynix’s sales hit $17.5 billion, up 13% QoQ.
Sources: PayPay’s U.S. IPO in December Could Value It Over $20 Billion
Two sources say that as SoftBank prepares for a December U.S. IPO of Japanese payment app PayPay, investors expect a valuation exceeding ¥3 trillion ($20 billion).
Since mid-September, SoftBank has been meeting institutional investors to discuss the IPO’s potential valuation, with ¥2 trillion as a baseline but likely surpassing ¥3 trillion.
Institutional Views
CITIC Securities: OpenAI’s “Procurement + Equity” Model Benefits AI Ecosystem
CITIC Securities’ report notes OpenAI’s recent partnerships with AI supply chain firms to secure stable computing resources and enhance model capabilities.
The “procurement contract + equity” model with Nvidia and AMD fosters a closed-loop AI ecosystem, supporting industry growth and EPS for hardware and semiconductor sectors. Recommended investments: commercial GPUs, ASICs, Ethernet, storage, and advanced processes.
Huatai Securities: Sustained Port Fees Could Lift Global Oil and Bulk Shipping Rates
Huatai Securities’ analysis of U.S.-China port fee hikes suggests short-term fleet redeployments to cut costs could disrupt supply chains and raise rates. Long-term, Chinese shipping firms face higher levies than U.S. counterparts. Container shipping may see short-term price hikes to offset costs but faces long-term oversupply pressure.
Oil and bulk shipping, in an upcycle, can pass on fees to clients. Sustained fees could systematically elevate global oil and bulk shipping rates. Chinese oil and bulk shippers may benefit relatively, while container shipping could be hit harder.
Bank of America: Raises 2026 Gold Price Target to $5,000/oz
Bank of America raised its 2026 gold and silver price targets to $5,000/oz (average $4,400/oz) and $65/oz (average $56/oz), respectively. Extreme imbalances in the physical silver market may normalize, amplifying volatility.
HSBC: Dollar Likely to Weaken Again, Possibly Bottoming Early Next Year
Despite debates over whether the dollar has bottomed, HSBC believes it will weaken further. HSBC’s global FX research head Paul Mackel said historical patterns show the dollar weakens when the Fed restarts easing without a U.S. recession, a trend hard to break.
Standard Chartered: Strong U.S. Economic Momentum Could Limit 2026 Rate Cuts
Standard Chartered analysts Nicholas Chia and Steve Englander note that while the Fed is expected to cut rates through 2025, strong U.S. economic momentum could reduce 2026 cuts.
This could push up the dollar and Treasury yields long-term. They believe markets may scale back expectations of ~63bps of 2026 cuts, especially if U.S. growth and productivity exceed forecasts.
Nomura: Australian Markets Overprice RBA Rate Cuts
Nomura’s chief economist Andrew Ticehurst said the RBA’s September minutes show uncertainty about spare economic capacity and neutral cash rate levels. The RBA will remain data-driven, and its August dovish stance on “possible further cuts” is outdated.
Ticehurst notes markets are overpricing further RBA rate cuts.