APAC Market Wrap – Dec 11

Mainland China stock market:   

At the close, the Shanghai Composite fell 0.7%, the Shenzhen Component fell 1.27%, and the ChiNext Index fell 1.41%.

 

In terms of sectors, commercial aerospace, new listings and others led the gains, while Fujian, real estate and others were among the biggest decliners.

 

Hong Kong stock market: Hong Kong’s three major indices all adjusted lower, with the Hang Seng Tech Index down over 1% intraday.

 

At the close, the Hang Seng Index fell 0.04% to 25,530.51 points; the Hang Seng Tech Index fell 0.83% to 5,534.59 points; the H-Shares Index fell 0.23% to 8,934.28 points.  

 

From market performance, telecom equipment, semiconductors, brokerages and others weakened, while lithium batteries, wind power, pharmaceuticals and others strengthened.

 

Japanese stock market: The Nikkei Index fell 0.90% to 50,148.82 points.  

 

By industry, wholesale, securities, shipping and others rose, while information & communication, non-ferrous metals, power utilities and 11 others declined.

 

Korean stock market:The KOSPI fell 0.59% to 4,110.62 points.

 

Property insurance, roads, beverages and others rose, while oil & gas, semiconductors, multi-utilities and others declined.

 

Australian stock market: The S&P/ASX 200 rose 0.15% to 8,592.000 points.

 

Building materials, industrial distribution, apparel and others rose, while aerospace, auto & parts, agriculture and others fell.

 

Singapore stock market:The FTSE Singapore Straits Times Index STI rose 0.20% to 4,520.83 points.

 

Forestry products, travel & leisure, steel and others rose, while industrial products, industrial distribution, chemicals and others fell.

 

Malaysian stock market:The FTSE Malaysia KLCI rose 0.89% to 1,625.39 points.

 

Telecom & media, closed-end funds, transport & logistics and others rose, while construction, real estate, utilities and others edged lower.

Key Events  

Korea to issue retail 3-year government bonds starting next year  

 

Finance Minister Koo Yun-cheol said Thursday (Dec 10) that Korea will begin issuing new 3-year government bonds targeted at retail investors next year to broaden the investor base for government bonds and support inclusion in a major global government bond index.  

 

Speaking via video at the 12th Korea Treasury Bond Conference, Koo said Korea’s inclusion in the FTSE Russell World Government Bond Index (WGBI) in April next year will lay the foundation for growth in the bond market.  

 

To attract foreign investment, Korea will launch 3-year bonds for individual investors with regular interest payments and boost demand for short-term instruments such as treasury bills and KRW-denominated foreign-currency bonds.

 

Former BOJ official expects up to four rate hikes by 2027  

 

Ex-BOJ board member Hideo Hayakawa said Governor Ueda’s policy path could include up to four hikes by 2027 — three after the widely expected move next week.  

 

In a Wednesday interview, Hayakawa said: “They may feel they’ve fallen completely behind; Ueda might hint the cycle isn’t over after this hike.”  

 

His comments come as markets widely expect the BOJ to raise borrowing costs to 0.75% on December 19 — the first hike since January. The main focus will be how the BOJ describes the future policy path.

 

Vietnam to ban rare-earth ore exports  

 

Vietnam’s National Assembly amended the Mineral Law on Thursday, prohibiting rare-earth ore exports from January 1, 2026.  

 

Under the revision, rare-earth exploration, mining, and processing must be strictly controlled and conducted only by state-authorized entities. Deep processing of rare-earth minerals must be integrated with modern industrial ecosystems to enhance domestic value chains and ensure self-sufficiency.

Institutional Views  

Goldman Sachs: Fed hawks appeased, future easing depends on labor market  

 

GS analyst Kay Haigh said the Fed has reached the end of “preemptive cuts.” She believes: “The onus is now on labor market data to weaken further to justify additional near-term easing. Hard dissents and soft dissents in the dot plot highlight the hawkish camp, while reinserting ‘extent and timing’ language on future moves likely placates them.

 

While it leaves the door open, labor market weakness must meet a high bar.”

 

State Street: Fed weighing actual need for 3% terminal rate  

 

State Street analyst Marvin Loh said the expected cut can only be read as hawkish, as officials left next two years’ forecasts unchanged. “This will make rates glide very slowly toward the theoretical 3% neutral rate.

 

With SEP GDP significantly upgraded, adding ‘extent’ to describe additional adjustments suggests some FOMC members are questioning the need to reach the current 3% long-run dot plot target.”

 

ING: Still expect two Fed cuts in 2026  

 

ING said markets price 50 bps of cuts in 2026. With growth ongoing, unemployment low, stocks near highs, and inflation closer to 3% than the Fed’s 2% target, there seems little need for further easing.

 

Still, we suspect inflation will become more cut-friendly in coming months, giving doves justification for action.

 

ANZ: Gold pulls back slightly as market turns cautious on Fed easing pace  

 

Gold dipped below $4,200/oz as investors await Powell’s guidance on next year’s rate path. ANZ Research said: “With cut expectations high, traders are watching Fed clues on 2026 policy. Sharp Treasury sell-off in recent days has curbed risk appetite, with traders cautious on easing pace.”

 

Meanwhile, silver futures hit a fresh record high, now trading above $61/oz.

 

RBC Capital Markets: Average gold price $4,600 in 2026  

 

RBC precious metals analysts forecast gold has room to rise over the next two years. Despite 60% gains in 2025, the rally still has legs. They note central-bank buying and investment demand fundamentally reinforce gold’s value as a “non-sovereign asset.”

 

Latest forecast: average $4,600/oz in 2026, reaching $4,800 by year-end, and $5,100 average in 2027.

 

UBS: AI-themed stocks expected to rise further in 2026  

 

UBS Wealth Management CIO said strong capex trends and accelerating AI adoption will drive further gains for AI stocks in 2026. UBS Wealth Management APAC CIO & Head of CIO Office Min Lan Tan added: “AI development paths differ by region.

 

The U.S. focuses on cutting-edge infrastructure and large models; China emphasizes algorithm efficiency, tech self-reliance, and industrial applications. This means potential beneficiaries in regional tech supply chains may also differ.”