APAC Market Wrap - Dec 16
China Stock Market:At close, the Shanghai Composite fell 1.11%, the Shenzhen Component dropped 1.51%, and the ChiNext Index declined 2.1%.
Retail, education, dairy, and diversified financials led gains, while precious metals and cinema chains lagged.
Hong Kong Stock Market:Hong Kong’s three major indices all closed lower. The Hang Seng Index fell 1.54% to 25,235.41 points, the Hang Seng Tech Index dropped 1.74% to 5,402.51 points, and the H-share Index declined 1.79% to 8,757.93 points.
The market showed structural divergence, with tech/internet, semiconductors, pharma, and gold stocks mostly weak, while airline shares stood out as a bright spot.
Japan Stock Market:The Nikkei Index fell 1.56% to 49,383.29 points.
Air transport, pulp/paper, and fisheries rose, while non-ferrous metals, securities, and mining declined.
Korea Stock Market:The KOSPI fell 2.24% to 3,999.13 points.
Cigarettes, communications services, and cosmetics rose, while non-ferrous metals, electrical products, and chemicals fell.
Australia Stock Market:The S&P/ASX 200 fell 0.42% to 8,598.90 points.
Aerospace, education, and restaurants gained, while alternative energy, apparel, and agriculture weakened.
Singapore Stock Market:The Straits Times Index (STI) fell 0.21% to 4,579.73 points.
Forestry products, education, and apparel rose, while personalized services, industrial products, and cyclical retail declined.
Malaysia Stock Market:The FTSE Malaysia KLSE Index rose 0.28% to 1,648.31 points.
Real estate investment, transport/logistics, and plantations gained, while closed-end funds, tech, and energy saw mild drops.
Key Events
UK and Korea finalize new FTA, 98% of goods tariff-free
The UK has sealed a long-planned free trade deal with Korea, with the UK government saying it will benefit exporters from Bentley cars to Diageo beverages.
UK Trade Secretary Chris Bryant finalized the agreement Monday in London with Korea’s Trade Minister Lyu Han-kyu.
Bitcoin slides toward yearly low! Crypto market faces sustained selling pressure
Bitcoin fell below $86,000 for the first time in two weeks, souring investor sentiment. The largest cryptocurrency is sinking deeper into bear territory.
Analysts say Bitcoin is nearing the lower end of its recent range, and any rebound could trigger another sell-off as buyers from the early-October all-time high look to cut losses.
This Friday! BoJ rate hike all but certain, rates to hit 30-year high
The Bank of Japan announces its final rate decision of the year this Friday.
Despite U.S. tariff hits and dovish calls from Prime Minister Sanae Takaichi, markets expect the BoJ to hike and pledge further increases.
This would be the second hike of the year, pushing rates to a 30-year high. Though still below global averages after three decades of ultra-low rates, it marks another milestone in Governor Kazuo Ueda’s normalization push.
U.S. November nonfarm payrolls tonight! Morgan Stanley: “Moderately soft” jobs = higher cut odds
The delayed U.S. November jobs report is out tonight. Morgan Stanley’s Michael Wilson said pre-report that moderately soft data could lift stocks by raising Fed cut chances.
Wilson noted markets are back to “good news is bad news” for stocks (strong jobs reduce cut odds).
Korea cabinet approves 1 ppt corporate tax hike
Korea’s cabinet Tuesday passed a bill raising corporate tax rates by 1 percentage point across brackets starting next year, part of expansionary fiscal policy.
Taxable income over 300 billion KRW will face 25%, 200–300 billion KRW at 22%.
Institutional Views
Citi sets S&P 500 2026 target at 7,700, AI remains key theme
Citi targets 7,700 for the S&P 500 by end-2026 on strong earnings and AI tailwinds. AI infrastructure stays central in 2026, shifting focus from tech providers to adopters. Strategists: “AI will dominate but follow winner-takes-most dynamics.” Target implies 12.7% upside from Tuesday’s 6,827.41 close.
Goldman Sachs raises 2026 copper forecast on lower tariff risk
Goldman Sachs lifted 2026 copper to $11,400/ton from $10,650, citing lower odds of U.S. refined copper tariffs in H1 2026 due to affordability concerns. 2027 unchanged at $10,750/ton, expecting LME prices to retreat post-tariff/rebalancing.
UBS: Bull case gold over $5,000/oz in 2026
UBS sees gold topping $5,000/oz in 2026 if growth worsens, trade tensions flare, Fed independence erodes, and stocks sell off. Bear case: better U.S. growth, stronger dollar, hawkish Fed pulls gold to $3,500/oz in 2026.
Mitsubishi UFJ previews nonfarm: Weak data could accelerate USD selling into year-end
Ahead of the U.S. November jobs report tonight, Mitsubishi UFJ’s Michael Wan said disappointing data and rising unemployment would reinforce Fed dovishness, potentially speeding USD selling through year-end. Data quality issues from the shutdown could add volatility as traders recalibrate on incomplete info.