APAC Market Wrap - Nov 17
China Stock Market: At close, Shanghai Composite down 0.46%, Shenzhen Component down 0.11%, ChiNext down 0.2%.
Sectors: energy metals, defense, AI applications led gains; precious metals, pharmaceuticals led declines.
Hong Kong Stock Market: Hong Kong's three major indices continued adjusting. At close, Hang Seng fell 0.71% to 26,384.28 points; Tech Index fell 0.96% to 5,756.88 points; State-owned Enterprises Index fell 0.74% to 9,328.40 points.
From market performance, gold, pharmaceuticals, and lithium battery stocks mostly weak; coal and oil stocks bucked the trend higher.
Japan Stock Market: Nikkei 225 fell 0.1%, or 52.62 points, to 50,323.91.
From industries, non-ferrous metals, electricity, pharmaceuticals led gains; securities, air transport, retail fell.
Korea Stock Market: Korea Composite Stock Price Index (KOSPI) up 1.94%. Semiconductors, electronic equipment, hotels, utilities rose; publishing, insurance, securities fell.
Australia Stock Market: S&P/ASX 200 up 0.02% to 8,636.400 points. Aerospace, healthcare services, hardware rose; medical equipment, forestry products, capital markets fell.
Singapore Stock Market: FTSE Singapore Straits Times Index STI down 0.05% to 4,543.59 points. Sectors: diversified financials, non-alcoholic beverages, hardware rose; personalized services, furniture, forestry products fell.
Malaysia Stock Market: FTSE Malaysia KLSE up 0.11% to 1,627.43 points. Sectors: energy, construction, transport & logistics rose; utilities, healthcare small declines.
Key events
Classify crypto as financial products? Japan considers new crypto rules with strict regulation
Japan's Financial Services Agency (FSA) reportedly considering classifying crypto assets as "financial products" under the Financial Instruments and Exchange Act. If advanced, this would be historic.
Local media reports FSA drafting rules to redefine crypto as "financial products subject to insider trading rules" and lower tax rate on investment gains.
Rule would apply to Japan's existing 105 cryptocurrencies, including Bitcoin, Ethereum, and wide range of altcoins.
Under Trump tariff shock, Japan economy contracts first time in six quarters
Monday, Japan government data showed Q3 (July-September) economy shrank annualized 1.8%, due to U.S. President Trump's tariff policies causing sharp export drop.
Government says quarterly GDP contracted 0.4% QoQ, first contraction in six quarters, though milder than market-expected 0.6%.
Annualized rate shows what would happen if pace continued one year. Though decline smaller than expected 0.6%, quarterly exports fell 1.2% QoQ, 4.5% YoY.
On AI and more! After U.S.-Korea trade deal, Samsung and Korean firms pledge bigger domestic investment
Sunday, Samsung Electronics and other major Korean companies announced new domestic investment plans in meeting with President Lee Jae-myung. Lee hopes measures ease concerns Korean firms may shift investment focus to U.S. after trade deal.
Days before Lee met business leaders, Korea government finalized trade deal with U.S., pledging $350 billion investment in U.S. industry to avoid Trump's highest tariffs.
Global chip giant Samsung says to invest 450 trillion KRW (~$310 billion) over next five years expanding domestic operations, including new production line at Pyeongtaek campus to meet AI-driven global semiconductor demand surge.
Institutional views
Goldman analysts say driven by rising energy demand and scaling challenges for low-carbon tech, global oil demand expected to grow to 2040. Forecast demand reach 113 million bpd, above last year's 103.5 million bpd, thanks to lack of jet fuel and petrochemical substitutes, AI boost, and overall global energy demand growth outpacing oil replacement by low-carbon alternatives.
Analysts: "We expect 2025-2030 average annual demand growth robust 900 kb/d, then slow to 100 kb/d to 2040."
Morgan Stanley report says after high returns in 2025, 2026 will be consolidation year. With moderate EPS growth and valuations stable at higher levels, index upside limited. Base case Hang Seng end-2026 target 27,500; bull case 34,700; bear case 18,700. H-share Index base case end-2026 9,700; bull 12,190; bear 6,670.
BofA survey: Market split on AI-driven future rate outlook
Bank of America FX and rates sentiment survey shows about half investors expect AI to steepen yield curve. Survey finds 27% expect AI bring lower rates and steeper curve, 24% see no material impact, another 24% expect higher rates and steeper curve. 6% expect higher rates but flatter curve, 3% lower rates but flatter curve.