ASIA STOCKS: Asian Equities Track Wall Streets Sell-Off, Focus Turns To Payrolls
Mar-07 02:44
Asian equity markets tracked a U.S. sell-off, driven by persistent uncertainty over Trump’s shifting tariff policies, which eroded risk appetite and confidence in the global economic outlook. Despite a delay in tariffs on Mexican and Canadian goods until April, fragile sentiment persisted, amplified by Trump’s dismissal of market reactions and hints of future levies. Tech stocks slumped regionally after U.S. peers like Nvidia faltered, though late U.S. optimism from Broadcom’s AI-driven forecast offered a glimmer of hope. China’s robust stimulus signals and a focus on consumption and tech bolstered some resilience, yet tariff fears capped gains. Commodity-linked currencies weakened, and Japan saw sharp declines tied to export sensitivity, while South Korea’s chip-heavy index faltered. Australia faced broad losses amid banking and energy woes, and smaller markets like Malaysia and Vietnam showed muted responses, all bracing for the US jobs report as a potential volatility trigger.
- Chinese stocks retreated after hitting a four-year high, with the CSI 300 Index falling 0.3%. Optimism from Beijing’s fiscal stimulus plans, a record-high 2025 broad deficit, and the PBOC’s pledge for looser monetary policy (including rate and RRR cuts) supported sentiment. JD.com’s strong earnings, reflecting faster revenue growth and improved consumer sentiment, reinforced confidence in policy traction, though tariff uncertainty tempered gains.
- Hong Kong's HSI opened 0.8% lower following a stellar Thursday, as profit-taking emerged after gains driven by tech heavyweights like Alibaba and JD.com, however we have since recovered somewhat to trade just 0.10% lower. The MSCI China gauge, fueled by AI narratives and firms like Tencent, continued to outpace MSCI Hong Kong, despite external tariff pressures. Beijing’s tech and consumption support provided a positive backdrop, but US trade policy volatility kept markets on edge.
- Japan’s Topix Index fell 1.2%, while the Nikkei is down nearly 2%, reflecting sensitivity to US tariff shifts and a broader tech sell-off. Export-oriented firms faced pressure despite the dollar’s fifth-day decline.
- South Korea's Kospi declined as much as 1.4%, weighed down by large-cap chip stocks like Samsung Electronics and SK Hynix, echoing a 4.5% drop in the U.S. Philadelphia Semiconductor Index, however we have seen a bounce heading into lunch with the index now just 0.30% lower, as Samsung find some support. Mdevice, a SSD maker, soared 65.27% on its Kosdaq debut, buoyed by AI-driven demand.
- Australia's ASX 200 dropped 1.50% poised for its worst close since September, mirroring Wall Street’s tariff-driven slump. Banks like CBA (-3.8%) and financials (-2.5%) led losses, with energy stocks down 1.3% despite stable oil prices (WTI above $66). Mining giants held steady with iron ore above $US100.
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ASIA STOCKS: China & HK Equities Mixed As China Returns From LNY
Feb-05 02:19
As China returns from LNY markets are trading mixed. The CSI 300 is trading 0.20% lower, while small-cap indices are performing better with the CSI 1000 & 2000 trading about 1% higher. Hong Kong listed equities are performing worse with the HSI down 1.20%, HS Tech Index is -1.60%, while the Mainland Property Index trade -1.30%.
- Chinese Travel & Tourism: Airline and travel stocks declined, with China Southern and Air China down ~4%, and Trip.com falling ~5%. However, regional tourism data was positive—Guangdong saw 80m visitors with ¥74b in tourism revenue (+7.5% YoY), Shanghai had 17.8m tourists (+6.1% YoY), and Beijing's retail sales from restaurants and stores hit ¥8.1b (+4.2% YoY).
- E-commerce & Logistics Hit by US Postal Suspension: Alibaba fell 2.1%, JD.com dropped 5.1%, and SF Holding declined as the US halted inbound parcels from China & Hong Kong, adding uncertainty to the sector.
- Sector-Specific Moves: Tungsten stocks gained 3%+ after China imposed export controls, while genetic sequencing firms rose after Beijing blacklisted US company Illumina. AI-related stocks surged, with Iflytek up 8.5%, TRS Information rising 20%, and Beijing Kingsoft up 18%.
- Hong Kong Selling Pressure: The Hang Seng China Index fell 1.8%, with HK$2b ($257m) in mainland investor selling. Maoyan Entertainment dropped 14% despite record Chinese New Year box office numbers, while Enlight Media surged 20%.
CHINA: Bond Futures Stay Calm as Markets Return from Leave.
Feb-05 02:04
- China’s bond futures showed little regard for the uncertainty abounding from the impending trade war.
- Whilst equities are down, (Hang Seng -1.15%, CSI 300 -0.30%) bonds futures are marginally lower at the open.
- China’s 10YR Bond Mar 25 future is lower by -0.05 at 109.35
- China’s 2YR Bond Mar25 future is lower by -.044 at 102.80
- Prior to the Lunar New Year Break the 10YR future had bounced on the 20-day EMA and moved higher and remains above that technical level of 109.077.
- China’s 2YR Bond future is trending below the 20-day EMA of 102.83 and is at the midpoint of it and the 50-day EMA of 102.78.
- Economic data this week has been softer with PMI Manufacturing and PMI Services weaker, but likely impacted by the earlier than expected Lunar Holidays.
- Over the coming weekend, China will release its January PPI data which is expected to show the deflationary pressures for producers remains a key issue.
CHINA: Caixin PMI Services Decline for January.
Feb-05 01:57
- China’s PMI Services for January declined to 51.0, from 52.2; likely impacted by the earlier than usual Lunar New Year Holiday.
- This follows Monday’s release of the China PMI Manufacturing at 50.1.
- The overall PMI composite saw a decline to 51.1 for January from 51.4 prior.
- The PMI services result was the lowest reading since September and saw the employment component decline to 48.8 to mark the lowest contribution since April.
- Additionally, the prices charged component saw a decline versus the prior month.
- It is likely that this data release will be of little cause for concern due to the impact of the holidays.
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