APAC Market Wrap - Dec 12
China Stock Market: At close, the Shanghai Composite rose 0.41%, the Shenzhen Component gained 0.84%, and the ChiNext Index climbed 0.97%.
Leading sectors included controllable nuclear fusion, precious metals, power grid equipment, and commercial aerospace, while retail, real estate, and Hainan lagged.
Hong Kong Stock Market: Hong Kong markets adjusted this week. At Friday’s close, the Hang Seng Index fell 0.42% weekly to 25,976.79 points, the Hang Seng Tech Index dropped 0.43% to 5,638.05 points, and the H-share Index declined 1.29% to 9,079.35 points.
Power equipment, securities, gold, insurance, and consumer electronics outperformed.
Japan Stock Market:The Nikkei 225 rose 1.37% to 50,836.55 points.
Transport equipment, insurance, and steel led gains, while mining and fisheries/agriculture/forestry declined.
Korea Stock Market:The KOSPI rose 1.38% to 4,167.16 points.
Airlines, aerospace, energy equipment, and construction rose, while insurance, life sciences, transportation, health management, and biotech fell.
Australia Stock Market:The S&P/ASX 200 gained 1.23% to 8,697.30 points.
Metals & mining, biotech, and agriculture advanced, while semiconductors, apparel, and homebuilding weakened.
Singapore Stock Market:The Straits Times Index (STI) rose 1.36% to 4,582.42 points.
Furniture, industrial distribution, and construction materials gained, while forestry products, transportation, and industrial products slipped.
Malaysia Stock Market:The FTSE Malaysia KLSE Index rose 0.76% to 1,637.81 points.
Utilities, healthcare, and energy advanced, while closed-end funds and communications/media edged lower.
Key Events
SoftBank eyes acquisition of data center operator Switch, potentially a major AI move
Insiders say SoftBank is studying a possible takeover of U.S. data center operator Switch, signaling founder Masayoshi Son’s push into AI-driven digital infrastructure. SoftBank has held talks with Switch management and conducted due diligence on the private company.
Warning light on: U.S. smartphone imports from Vietnam hit 5-year low in November
Shifting trade dynamics are hitting Vietnam’s electronics exports to the U.S. Official data show November smartphone and parts imports from Vietnam at a five-year low.
Though smartphones are exempt from U.S. tariffs, uncertainty weighs on the market. Shipments peaked in January, rebounded in May after Trump exempted phones and electronics from high tariffs, then plunged after August’s 20% tariff on Vietnamese goods.
SK On and Ford to dissolve U.S. battery JV, signaling shift in U.S. EV landscape
Ford and SK Innovation will unwind their U.S. battery manufacturing JV, a potential sign of major changes in the American EV supply chain.
SK On will take the Tennessee BlueOval SK plants, Ford the Kentucky ones via a subsidiary. The split is expected by end-Q1 2026, pending approvals. The 2021 JV planned three mega-factories for $11.4 billion—Ford’s largest manufacturing investment in 118 years—for vertically integrated batteries for next-gen electric trucks and SUVs.
Institutional Views
BNP Paribas: Closed 10-year Treasury short after Fed cut
BNP Paribas booked profits on a short 10-year Treasury trade (entered at 4.09% yield, exited at 4.15%) after the Fed’s expected cut. Analysts say the Fed’s “unbalanced” reaction function will pressure rates until the next jobs report. Despite a split vote, policymakers emphasized labor market weakness.
Fitch: U.S. leveraged loan default rate to ease in 2026
Fitch analysts expect U.S. leveraged loan defaults to fall in 2026 as the Fed keeps cutting. Looser policy will ease interest burdens for high-debt issuers. Forecasts: 4.5–5.0% for leveraged loans and 2.5–3.0% for high-yield bonds by end-2026.
Scotiabank: USD bear market has only just begun
Scotiabank says the dollar’s decline this year follows years of gains, but the worst is yet to come. In its 2026 outlook, analysts Shaun Osborne and Eric Theoret stick to broad USD weakness into 2026 and 2027, driven by policy divergence—the Fed cutting sharply to 3% by mid-2026.
Jefferies: Japan stocks remain highly attractive into 2026
Jefferies quant strategist Shrikant Kale sees strong appeal for Japanese equities in 2026, with bottom-up corporate reforms from the Tokyo Stock Exchange and top-down pro-growth leadership aligning. The BoJ should normalize policy, but U.S. growth worries could raise Fed easing bets and support the yen.
Kale forecasts 13% upside for the Topix in 2026 on earnings growth, adding “While the market chases AI themes, but at lofty expectations, earnings carry risk.”