APAC Market Wrap – Dec 4
Mainland China stock market: At the close, the Shanghai Composite fell 0.06%, the Shenzhen Component rose 0.4%, and the ChiNext Index rose 1.01%.
In terms of sectors, robotics, commercial aerospace and others led the gains, while Hainan free-trade zone, tourism, food and others were among the biggest decliners.
Hong Kong stock market: Hong Kong’s three major indices all rose strongly. At the close, the Hang Seng Index rose 0.68% to 25,935.90 points; the Hang Seng Tech Index rose 1.45% to 5,615.43 points; the H-Shares Index rose 0.86% to 9,106.48 points.
Semiconductors, internet tech, robotics, and pharmaceuticals performed strongly, while autos and gold stocks weakened.
Japanese stock market: The Nikkei Index surged 2.23% to 51,028.42 points.
Out of 33 industries, 31 rose (led by wholesale, transportation equipment, securities, etc.), with only 2 declining.
Korean stock market:The KOSPI fell 0.19% to 4,028.51 points.
Electronics, services, autos, auto parts, air freight and others rose, while other financials, life sciences, healthcare, internet and others declined.
Australian stock market: The S&P/ASX 200 rose 0.27% to 8,618.400 points.
Semiconductors, furniture, independent power, other energy and others gained, while hotels, internet, gaming & entertainment, roads and others fell.
Singapore stock market:The FTSE Singapore Straits Times Index STI rose 0.36% to 4,554.52 points.
Building materials, diversified financials, biotechnology and others rose, while agriculture, independent power, real estate and others declined.
Malaysian stock market:The FTSE Malaysia KLCI fell 0.11% to 1,621.07 points.
Telecom & media, energy, tech and others rose, while REITs, closed-end funds, utilities and others edged lower.
Key Events
BOJ December rate hike almost certain! Government reportedly will not intervene
Three sources familiar with government thinking said the Bank of Japan is very likely to raise rates in December, and the Japanese government is expected to accept the decision.
The BOJ appears inclined to lift the policy rate from 0.5% to 0.75%. BOJ Governor Kazuo Ueda also hinted at this in a speech this week. If implemented, it would be the first hike since January this year.
Goldman Sachs: Copper’s current record-breaking rally unlikely to be sustained
Goldman Sachs injected some caution into the copper outlook, saying the current elevated price level will be hard to maintain due to ample supply meeting global demand. The bank forecasts copper to trade between $10,000–$11,000 per ton in 2026.
Analysts including Aurelia Waltham wrote: “Most of the recent price surge is based on expectations of future tightness rather than current fundamentals. We do not expect the current breakout above $11,000/t to last.”
Australia’s social media ban for under-16s takes effect soon
Australia’s social media ban for those under 16 officially takes effect on December 10. The government said on December 3 that the ban will protect children from harmful content.
Last November, parliament passed legislation prohibiting minors under 16 from using most social media platforms. Platforms that fail to take reasonable steps to block underage users face fines of up to A$50 million (~RMB 232 million). Minors and their parents will not be punished.
Japan 30-year JGB auction demand hits strongest since 2019 as rate-hike expectations heat up
The bid-to-cover ratio for Japan’s 30-year JGBs reached 4.04× — far above last year’s average of 3.35× — with yields rising to 3.445%, the highest since 1999. Strong demand stems from attractive yields and expectations of reduced super-long issuance.
Institutional Views
At an offline media roundtable on Dec 2, Morgan Stanley China Chief Economist Xing Ziqiang and Chief China Equity Strategist Wang Ying discussed 2026 outlook. The bank said global capital is re-embracing Chinese assets as the “U.S. exceptionalism” narrative fades, redefining China as a “growth market.”
They slightly raised China equity targets, setting the December 2026 CSI 300 target at 4,840 and stating a 12–13× forward P/E for MSCI China is reasonable.
While raising H1 2026 forecasts and noting U.S. tariffs will support prices, the bank believes regional premiums and tighter LME spreads can prevent “extremely low” inventories outside the U.S. Global demand is expected to exceed supply by ~500 kt this year, but a true shortage may not emerge until 2029.
Barclays remains bullish, forecasting continued gains despite policy uncertainty, supported by solid fundamentals, ongoing AI-driven investment, and expected monetary easing (including further Fed cuts). Earnings will lead the way, with 8% EPS growth expected in Europe next year.
Barclays highlights attractive European valuations and sets a STOXX 600 target of 620 (~9% upside), assuming the AI cycle persists and laggards catch up.
Deutsche Bank Research says the global AI investment theme is bullish for Asia, though ongoing valuation and ownership debates may heighten volatility. Hyperscaler capex remains a core driver of U.S. growth and Asian demand.
Rising DRAM prices, stronger orders at major tech manufacturers, and accelerating exports from tech-heavy economies like Singapore and Malaysia suggest the narrative will stay supportive in coming quarters — albeit with greater swings.
ING senior economist Min Joo Kang expects USD/KRW to strengthen in 2026, driven by upcoming Fed cuts, the BOK potentially ending its easing cycle, and easing trade tensions.
Narrowing U.S.-Korea rate differentials and Korea’s GDP growth likely outpacing the U.S. next year should help. Forecasts USD/KRW at 1,375 by mid-2026 and 1,400 by year-end (recent levels ~1,470).
Nomura’s Asia ex-Japan equity strategist Chetan Seth said strong earnings forecasts and supportive macro trends will drive double-digit returns for MSCI Asia ex-Japan in 2026.
Despite AI bubble concerns, he remains positive on AI stocks due to supply still lagging robust demand. Nomura recommends balanced portfolios, with top 2026 picks Korea (strong tech earnings) and India (robust domestic demand).