APAC Market Wrap - Nov 10

China Stock Market: At close, Shanghai Composite up 0.53%, Shenzhen Component up 0.18%, ChiNext down 0.92%. Sectors: baijiu, tourism & hotels, duty-free led gains; gas, wind power equipment, robotics led declines.  

 

Hong Kong Stock Market: Hong Kong's three major indices strong. At close, Hang Seng up 1.55% to 26,649.06 points; Tech Index up 1.34% to 5,915.56 points; State-owned Enterprises Index up 1.90% to 9,443.24 points.  

 

From market performance, gold, autos, pharma, some new consumption concepts strong.  

 

Japan Stock Market: Tokyo Nikkei 225 up 1.2% to 50,897.20 points. Chipmaker Tokyo Electron and other AI-related stocks surged, pushing index higher, Tokyo Electron up 4.7%.  

 

Korea Stock Market: Korea Composite Stock Price Index (KOSPI) led gains, soaring 3.5%. PC chipmaker SK Hynix, Nvidia AI partner, surged 5.5%. Main rival Samsung Electronics up 2.4%.

 

Australia Stock Market: S&P/ASX 200 up 0.7% to 8,826.50 points. Sectors: semiconductors, agriculture, chemicals up; non-alcoholic beverages, apparel, pharma down.  

 

Singapore Stock Market: FTSE Singapore Straits Times Index down 0.09% to 4,488.13 points. Sectors: education, non-alcoholic beverages, oil & gas up; asset management, industrial distribution, agriculture down.  

 

Malaysia Stock Market: FTSE Malaysia KLSE Index up 0.51% to 1,627.38 points. Sectors: transport & logistics, tech, communications & media up; energy, business trusts, REITs small drops.  

Key events  

First in over 30 years! Emerging market inflation below developed economies for two straight quarters  

 

Global inflation trends rare shift. Data shows emerging market CPI growth below developed nations two quarters running—first in at least 35 years. Market expects this fuels emerging market bond rally this year.  

 

For investors, new opportunities. Morgan Stanley Investment Management, Ninety One actively positioning for further gains in EM local-currency bonds, believing EM central banks more room to cut faster than developed.

 

Morgan Stanley Investment Management deputy CIO Jitania Kandhari: "Means monetary policy in EM can be more supportive."  

 

Beware extreme cold! Experts warn polar vortex weakening May spread cold air south  

 

Meteorologists warn signs Arctic polar vortex may weaken, pushing cold air south across Northern Hemisphere this winter. Could raise odds of extreme cold in parts of U.S., Asia, Europe, hike consumer energy bills.  

 

Verisk Atmospheric and Environmental Research Center seasonal forecast director Judah Cohen: Quasi-biennial oscillation monsoon blowing east may trigger sudden stratospheric warming—rapid, intense temperature rise in atmospheric layer—ultimately weakening polar vortex.  

 

He stressed if sudden stratospheric warming earlier than last year, major impact on entire winter weather.  

 

Japan labor shortage costs over $100 billion in one year  

 

Per latest joint analysis by Japan Research Institute, labor shortage cost Japan economy ¥16 trillion (about $104 billion) in 2024—4x five years ago, equal 2.6% nominal GDP, highlighting aging population deep impact on world's fourth-largest economy.  

 

Non-manufacturing hit hardest, losses ¥13 trillion. Hotels, dining, elderly care face-to-face services toughest—labor-intensive, hard to standardize or automate.  

Institutional views 

Analysts: Malaysia central bank likely on hold next year Growth and inflation stabilizing  

 

Fitch Solutions' BMI analysts in report say with growth and inflation stabilizing, Bank Negara Malaysia likely keep policy rate unchanged throughout 2026.  

 

Report notes BNM no excessive inflation worry, 2026 inflation likely stable at 1.7% average, mild global commodity prices continue suppress pressures. Though Malaysia growth may slow from 2025 expected 4.2% to 2026 4.1%, BMI sees risks broadly balanced.  

 

Institution says major economies accelerating growth plus ongoing AI investment boom may boost exports and growth. But BMI warns if exporters' front-loading eases, could drag subsequent export growth.  

 

MUFG: U.S. government ending shutdown reduces data uncertainty and boosts investor sentiment  

 

MUFG Singapore senior currency analyst Lloyd Chan says shutdown-end deal could trigger significant market reaction, mainly lower data uncertainty and lift investor sentiment. Recent U.S. stock rebound seems driven by technical recovery and market optimism shutdown ending soon.  

 

Citi: Japan 30-year JGB yield likely range-bound  

 

Citi Investment Research's Tomohisa Fujiki in report says 30-year Japan bond composite yield likely stay 3%-3.2% range for some time. Strategist: "Regardless budget size, reduced issuance supports ultra-long bonds." Citi expects 20-year and 30-year JGB auction sizes cut ¥100 billion each, 40-year issuance pace slows next year.

 

Says market may continue U.S.-driven, but with Q3 GDP contraction confirmed, market pricing for BOJ December hike should weaken. Per Tradeweb, 30-year JGB yield up 0.3 bps to 3.136%.  

 

Goldman: U.S. capital flooding Japan stocks, participation at 3-year high  

 

Goldman says growing U.S. investors buying Japan tech and AI-focused stocks, attracted by strong returns vs U.S. Goldman chief Japan equity strategist Bruce Kirk: "U.S. capital inflow speed fastest since 'Abenomics.'" Adds U.S. investor active participation in Japan stocks at highest since October 2022. U.S. capital surge reflects Japan market strong performance this year, thanks to yen appreciation and optimism on Sanae Takaichi stimulative policies.

 

In USD terms, Nikkei 225 up about 30% YTD—far above S&P 500's 14%. Kirk sees room for more foreign inflows, as global investors' net Japan holdings still far below "Abenomics" peak, ongoing global asset diversification demand may support trend.