APAC Market Wrap - Oct 22

 

China Stock Market: At the close, the Shanghai Composite fell 0.07%, the Shenzhen Component dropped 0.62%, and the ChiNext Index declined 0.79%.

 

By sector, oil and gas, construction machinery, and wind power equipment led gains, while precious metals, coal, and batteries saw the largest declines.

 

Hong Kong Stock Market: After two days of rebound, Hong Kong stocks lost upward momentum today. At the close, the Hang Seng Index fell 0.94% to 25,781.77 points, the Tech Index dropped 1.41% to 5,923.09 points, and the H-share Index declined 0.85% to 9,223.78 points.  

 

Market performance showed weakness in gold, retail, consumer electronics, and gaming stocks, while oil and banking stocks rose against the trend.

 

Japan Stock Market: The Nikkei 225 fell 0.02% after three days of gains, closing at 49,307.79 yen, down 8.27 yen.  

 

By industry, 26 sectors, including transportation equipment, construction, textiles, and retail, rose, while 7 sectors, such as information and communication, nonferrous metals, banking, and securities futures, fell.

 

South Korea Stock Market: The KOSPI rose 1.56%. By sector, diversified utilities, chemicals, and air freight surged, while nonferrous metals, tobacco, and securities declined.

 

Australia Stock Market: The S&P/ASX 200 fell 0.71% to 9,030.700 points.

 

Apparel and accessories, utilities, and oil saw modest gains, while oil, industrial products, agriculture, and education posted larger declines.

 

Singapore Stock Market: The FTSE Straits Times Index (STI) rose 0.29%.

 

Aerospace, industrial products, education, non-alcoholic beverages, and oil and gas sectors gained, while medical equipment, cyclical retail, steel, and interactive media declined.

 

Malaysia Stock Market: The FTSE Malaysia KLCI fell 0.87%. Closed-end funds and transportation and logistics rose, while utilities, financial services, and communication and media saw slight declines.

Key Events

Singapore to Announce More Stock Market Boosting Measures in November  

 

Edward Chia, Deputy Chairman of the Monetary Authority of Singapore, said at a DBS Group event that Singapore plans to announce measures in November to support listed companies in creating greater shareholder value and engaging proactively with investors on business plans.  

 

Chia noted these initiatives will include government subsidies.  

 

Singapore is advancing the second batch of fund manager appointments under its S$5 billion securities market development plan, expected to be completed later this year.

 

Samsung and SK Hynix Showcase Latest HBM4 Chips, Competing in Sixth-Gen AI Chip Market  

 

At the 2025 Semiconductor Exhibition in Seoul on Wednesday, Samsung Electronics and SK Hynix displayed their latest high-bandwidth memory (HBM) chips, signaling fierce competition in the sixth-generation AI chip market.  

 

During the three-day event in Yeouido-dong, Gangnam, Seoul, both companies showcased HBM4 chips, expressing confidence in leading the semiconductor industry.  

 

HBM is an advanced high-performance memory chip critical to Nvidia’s GPUs for generative AI systems.

 

Indian Media: India and U.S. Near Trade Deal, Tariffs to Drop from 50% to 15%  

 

According to Mint, India and the U.S. are close to finalizing a trade deal, with India potentially agreeing to reduce Russian oil imports in exchange for tariff concessions.

 

The Times of India reported that the first phase of the deal is expected to be finalized between October and November, aiming to boost bilateral trade to $500 billion by 2030.  

 

The deal could lower India’s export tariffs from a punitive 50% to 15-16%.

 

Sovereign Wealth Funds Drive M&A Surge, Global Deals Exceed $3.5 Trillion This Year  

 

Cash-rich sovereign wealth funds are fueling a revival in mergers and acquisitions, with global M&A deals surpassing $3.5 trillion this year.  

 

Government-backed funds from the Middle East and Asia have powered some of the year’s largest deals. Blackstone Inc. and TPG Inc. agreed Tuesday to acquire medical device maker Hologic Inc. for $18.3 billion (including debt), with minority stakes held by the Abu Dhabi Investment Authority and Singapore’s GIC.

Institutional Views

DBS: Singapore’s GDP to Double by 2040, SGD to Reach Parity with USD  

 

DBS Group Research said Wednesday that Singapore’s GDP is expected to double by 2040, with the Straits Times Index nearing 10,000 points and the Singapore dollar potentially reaching parity with the U.S. dollar.  

 

The research arm of Singapore’s largest bank projected a 2.3% average annual real GDP growth rate over the next 15 years, outpacing other developed economies.  

 

DBS Group Research Head Timothy Wong noted that despite rising global uncertainties, Singapore’s long-term outlook remains positive.  

 

From a 2024 GDP base of $547 billion, Singapore’s GDP is projected to grow to $1.2-$1.4 trillion by 2040.

 

Goldman Sachs: China’s Stock Market Enters Slow Bull Phase, Key Indices to Rise ~30% by 2027  

 

Goldman Sachs said China’s stock market is entering a more sustained uptrend, with key indices expected to rise ~30% by the end of 2027, driven by 12% earnings growth and 5-10% further revaluation potential.

 

Reuters Poll: Fed Expected to Cut Rates Twice This Year, 2026 Path Highly Uncertain  

 

A Reuters poll of economists from October 15-21 showed the Fed is expected to cut rates by 25 basis points next week and in December. However, economists remain deeply divided on the rate path by end-2026. A month ago, only one cut was expected this year, but recent Fed policymaker signals shifted expectations toward further easing.

 

Of 117 economists, 115 predicted a 25-basis-point cut on October 29, lowering rates to 3.75%-4.00%. Two expected a 25-basis-point cut in October and a 50-basis-point cut in December. Support for a December cut fell to 71%. Financial market traders are more confident, with rate futures fully pricing in two cuts this year.

 

City Index: Gold Plummets from Record Highs, Analysts Expect Bargain Hunters to Step In  

 

On Tuesday, precious metals crashed from unprecedented highs, with gold stabilizing and silver slightly lower in early Asian trading Wednesday. Meanwhile, U.S. stock market momentum showed signs of buyer fatigue. Factors driving the metals’ decline included positive trade talks, a stronger dollar, technical overbuying, government shutdown-related position uncertainty, and the end of India’s seasonal buying surge.

 

City Index and Forex.com analyst Fawad Razaqzada noted that gold’s recent rally was exceptional, driven by falling yields, central bank buying, and expectations of further monetary easing. He said: “Markets rarely move in straight lines. But it’s too early to say the broader bull trend is over. Many investors missed this rally and may soon buy the dip, helping to curb the sell-off.”

 

Goldman Sachs: Base Case Remains BOJ Rate Hike in January 2026  

 

Three Goldman Sachs economists said in a report that their base case is a Bank of Japan rate hike in January 2026, though a December hike is possible. The formation of a new government led by Sanae Takaichi, a supporter of Abenomics, adds uncertainty.

 

However, Goldman Sachs remains cautiously optimistic about the BOJ’s ability to continue raising rates and its independence, citing four reasons, including significant improvements in Japan’s economic and price conditions compared to the 2012 launch of Abenomics. There’s now “little need for large-scale monetary easing like Abenomics.”