APAC Market Wrap - Nov 1

China Stock Market: At close, Shanghai Composite up 0.55%, Shenzhen Component up 0.19%, ChiNext up 0.29%. Sectors: Hainan, gaming, film & cinema led gains; batteries, non-ferrous metals, rare earth magnets led declines.

Hong Kong Stock Market: Hong Kong's three major indices all closed higher. At close, Hang Seng up 0.97% to 26,158.36 points; Tech Index up 0.24% to 5,922.48 points; State-owned Enterprises Index up 0.98% to 9,258.73 points.

Performance: Coal, shipping, banks, software strong; gold, semiconductors under pressure.

Japan Stock Market: Closed

Korea Stock Market: KOSPI up 2.78%.

Sectors: Electrical equipment, semiconductor materials, electric utilities, aerospace & defense surged. Air freight, other metals, auto parts, retail fell.

Australia Stock Market: S&P/ASX 200 up 0.15% to 8,894.800 points.

Sectors: Drug manufacturers, banks, credit slight gains; semiconductors, medical equipment, restaurants bigger declines.

Singapore Stock Market: FTSE Singapore Straits Times Index up 0.35%.

Sectors: Forestry products, education, oil & gas up; building materials, furniture, apparel, diversified media down.

Malaysia Stock Market: FTSE Malaysia KLSE Index up 0.82%.

Sectors: Communications & media, financial services, healthcare up; tech, transportation & logistics slight declines.

Key Events

Singapore's Two Major Property Asset Managers Eye Merger

Insiders say Singapore's largest real estate asset managers—Temasek's Mapletree Investments and listed CapitaLand Investment—are exploring a merger. If it goes through, the combined entity would manage over $150 billion in assets, becoming an APAC real estate giant.

The plan is still very early; no certainty on outcome. CapitaLand Investment says it will keep creating long-term shareholder value and regularly evaluates M&A aligned with strategy, but doesn't comment on rumors. Temasek and Mapletree no response.

RBA Expected to Hold Rates Steady

Ahead of November 4 policy meeting, markets widely expect RBA to keep cash rate at 3.60%.

Q3 inflation above central bank forecast cooled near-term cut expectations. Focus on whether RBA raises near-term inflation path and keeps medium-term anchor of inflation back to 2-3% midpoint by end-2026.

Indian Rupee Nears Record Low Again, RBI Recent Interventions Limited Effect

Indian rupee nears fresh low; for this year's worst-performing Asian currency, RBI's recent interventions offer limited support.

Uncertainty over tariffs on India-U.S. exports and unclear Fed cut path pressure the rupee, which fell for a third straight session Monday to 88.7988 vs USD. After RBI unexpectedly sold heavy dollars last month to calm speculation, rupee failed to hold gains.

SK Hynix Jumps 10%, Local Broker More Than Doubles Target; Samsung Hits Record High

SK Hynix shares rose as much as 10% to highest since 1999 after record profit; SK Securities more than doubled target to 1 million KRW from 480,000 KRW—now most bullish among analysts.

SK Securities also raised Samsung target from 110,000 KRW to 170,000 KRW, kept buy. Samsung shares up as much as 3.5% to record high.

Institutional Views

Goldman Sachs: China Stocks Entering Growth Phase, A/H Index Potential 30% Return by End-Next Year

Goldman China equity strategist Fu Si: Overall, Goldman sees China stocks entering growth phase; AI, anti-involution, going overseas three strong profit drivers to boost Chinese firms' earnings outlook. Predicts A/H indices ~30% potential return to end-2027, driven by 12% annual compound profit growth and 5-10% P/E expansion.

Chinese tech soared this year, especially AI themes; Fu says driven by expectations, sentiment lifting valuations—tech valuations still attractive; next year focus more on fundamentals, need better earnings delivery to support valuations.

Goldman Sachs: This U.S. Government Shutdown Could Have Record Economic Impact

Goldman analysts in report: Current U.S. shutdown may have record impact on economy. "This shutdown could last longer than 2018-2019's 35-day partial one and is broader than past long shutdowns, which affected few agencies." Longer shutdown could hit federal procurement/investment more, with spillovers to private sector.

Goldman estimates ~6-week shutdown could cut Q4 2025 annualized quarterly growth 1.15 percentage points; Q1 2026 drop larger at 1.3 points due to some federal spillovers.

BofA: Gold and China Stocks Best Hedge for U.S. AI Bubble

BofA strategist Hartnett: China stocks and gold best hedges for U.S. AI trading frenzy pushing valuations high. S&P 500 forward P/E 23x, well above 20-year average 16x. "Magnificent Seven" tech group over one-third of U.S. benchmark weight, forward P/E 31x. Hartnett: "AI stock leadership won't shake short-term; we think gold and China stocks best hedge for U.S. AI boom/bubble."

Morgan Stanley: Gold Could Hit $4,500 by Mid-2026

Morgan Stanley Friday: Strong ETF and central bank physical demand, uncertain economic outlook—gold could reach $4,500/oz by mid-2026 (previously H2 2026). In report: "Recent gold moves put it in 'overbought' on RSI, but pullback brought healthier levels, likely cleared positions." Expects falling rates to sustain gold ETF buying; central banks keep purchasing though slower; jewelry demand stable. But warns downside risks: potential volatility could shift investors elsewhere, or central banks reduce reserves.

Nomura: Raises MSCI China and MSCI AC Asia ex-Japan Targets, Bullish on Earnings Growth and AI Outlook

Nomura analysts: Optimism in tech/AI puts Asia in earnings upcycle; prompts raising end-2026 MSCI China and MSCI AC Asia ex-Japan targets. Strategists Chetan Seth and Ankit Yadav in report: Asia earnings season starts solid (analysts raising estimates), thanks to AI capex growth potential—especially for some large Asian tech hardware makers.

Also note easing trade tensions narrowing risk premiums, justifying higher multiples for Hong Kong/mainland China. For MSCI AC Asia ex-Japan (MXASJ), end-2026 base target from 901 to 1,035 points—12% upside; MSCI China from 90 to 93 points—5% upside.