APAC Market Wrap - Oct 21
China Stock Market: At the close, the Shanghai Composite rose 1.36%, the Shenzhen Component gained 2.06%, and the ChiNext Index surged 3.02%.
By sector, lab-grown diamonds, construction machinery, and CPO led gains, while coal saw the largest declines.
Hong Kong Stock Market: Hong Kong’s three major indices rose collectively today. At the close, the Hang Seng Index gained 0.65% to 26,027.55 points, the Tech Index rose 1.26% to 6,007.94 points, and the H-share Index increased 0.76% to 9,302.66 points.
Market performance showed strength in internet tech, consumer electronics, semiconductors, insurance, and brokerage stocks, while most gold stocks weakened.
Japan Stock Market: The Nikkei 225 continued its climb, up 0.27% to close at 49,316.06 yen, a 130.56-yen increase from the previous day, marking consecutive record highs.
By industry, 17 sectors, including other products, other financials, metal products, and precision instruments, rose, while 16 sectors, such as nonferrous metals, insurance, machinery, and real estate, fell.
South Korea Stock Market: The KOSPI rose 0.24%. By sector, utilities, automotive, oil and gas, and aerospace & defense surged, while panels, securities, construction, electronics, and internet stocks declined.
Australia Stock Market: The S&P/ASX 200 rose 0.70% to 9,094.700 points. Aerospace, semiconductors, and agriculture saw modest gains, while credit services, waste management, industrial products, and alcoholic beverages posted larger declines.
Singapore Stock Market: The FTSE Straits Times Index (STI) rose 1.20%. Medical equipment, oil and gas, and apparel sectors gained, while medical distribution and medical services declined.
Malaysia Stock Market: The FTSE Malaysia KLCI rose 0.60%. Technology, construction, and consumer goods sectors rose, while real estate saw slight declines.
Key Events
Japan Marks Historic Moment: Sanae Takaichi Becomes First Female Prime Minister
On Tuesday, Sanae Takaichi won Japan’s prime ministerial election, becoming the country’s first female prime minister.
In the more powerful House of Representatives, she secured 237 votes, four more than the majority needed. Some independent lawmakers, including Tadashi Morishima, appeared to support her. The House of Councillors also voted in her favor.
Against Japan’s lag in female political representation, Takaichi’s appointment is a historic moment. However, she faces challenges like persistent inflation, tense security situations, and growing domestic political instability.
Australian Rare Earth Stocks Rise as U.S. and Australia Sign Critical Minerals Pact
Following a critical minerals and rare earths agreement signed on Tuesday by Australian Prime Minister Anthony Albanese and U.S. President Donald Trump, Australian rare earth stocks surged. Lynas Rare Earths rose 3.8%, Iluka Resources soared nearly 6%, Pilbara Minerals gained 4.7%, VHM surged over 30%, and Northern Minerals jumped nearly 15%.
Albanese said the agreement includes project plans worth up to $8.5 billion.
Omdia: India’s Q3 Smartphone Shipments Grow 3%
Market research firm Omdia reported Tuesday that India’s smartphone market grew 3% year-over-year in Q3 2025, with 48.4 million units shipped.
Strong festive season demand led vendors to stock channels with new products. Growth was driven by new product launches in July and August, retail incentives, and early Diwali inventory movement.
South Korea’s Exports to U.S. Plunge 24.7% in First 20 Days of October
South Korea’s customs data released Tuesday showed a 7.8% year-over-year export decline for October 1-20, mainly due to fewer working days from the Chuseok holiday.
Exports totaled $30.1 billion, down from $32.7 billion last year.
Institutional Views
Bank of America: Credit Tightening May Trigger Passive Selling, Bearish Signals for Stocks
Bank of America strategists warn that further credit market stress could spark a broad stock market sell-off, as long-term investors like pension funds may be forced to sell assets.
BofA’s Savita Subramanian said: “If private credit market volatility persists, institutions like pensions may sell index funds to avoid valuation adjustments in private assets.” She noted that passive investing “dominates the S&P 500,” so a market drop could force further index fund selling.
UBS: Japan Rate Hikes in Coming Months Seem Justified
UBS Global Research’s Chief Japan Economist Masamichi Adachi commented that rate hikes by the Bank of Japan in the coming months seem justified.
Japan’s negative real interest rates create very loose financial conditions. Inflation dynamics support reducing accommodation, as long-term inflation expectations are expected to rise toward 2.0%. UBS anticipates a 25-basis-point rate hike in January but doesn’t rule out a December increase.
Goldman Sachs: Brent Crude to Fall to $52/Barrel by Q4 Next Year
Goldman Sachs expects Brent crude prices to decline further, reaching $52/barrel by Q4 next year. However, a significant price drop may take time due to two factors: OECD commercial inventory builds in November may already be priced in, with the next acceleration not until January.
Scotiabank: Canadian Corporate Earnings May Hit Record, Supporting Toronto Market Rally
Canada’s stock market rally is poised to continue, driven by corporate earnings. Scotiabank predicts record Q3 profits for Canadian large-cap firms. Strong U.S. bank earnings signal positivity for Canadian peers, which account for 30% of the S&P/TSX Composite. Mining firms are also likely to benefit from soaring gold prices.
Despite U.S. trade war risks, high weightings of financials and mining may drive profits above expectations, supporting the index’s 23% year-to-date gain. Strategists note Q3 EPS consensus for S&P/TSX components may surpass last quarter’s record C$405.