ASIA STOCKS: Taiwan Sees Outflows, While India More Positive On Rate Cut Hopes
Asia Pac net equity flows have been mixed to start the week. South Korea has seen mixed trends since onshore markets returned from the early Oct break. We are positive for the past 5 trading days, but aggregate sums remain below recent highs. The Kospi is just below record highs, while focus remains on local chip makers linked into the global tech/AI boom. Sentiment in this space remains positive, but we have had a very strong run higherin recent months. In contrast, inflows into Taiwan have clearly lost momentum, with $2.3bn in net outflows for the past 5 trading days. Price action in the Taiex has been choppy in the past week, with offshore investors potentially taking some profit after most of Sep saw quite strong inflows (+$7.3bn for the month)
- Elsewhere, inflow momentum has been stronger into Indian markets, over $1.2bn in the past 5 trading days. Inflation outcomes have given hope to easier RBI policy settings, although local equities are struggling to build on earlier Oct gains.
- In South East Asia, outflow pressures have mostly been evident, although Indonesia's 5-day sum remains positive.
- Outflows from Malaysia have been most prominent from a trend standpoint, with local equities down sharply from earlier Oct highs abvoe 1650.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 311 | 582 | 2671 |
| Taiwan (USDmn) | -411 | -2313 | 7563 |
| India (USDmn)* | 400 | 1251 | -16526 |
| Indonesia (USDmn) | -82 | 133 | -6175 |
| Thailand (USDmn) | -88 | -163 | -3028 |
| Malaysia (USDmn) | -76 | -376 | -4116 |
| Philippines (USDmn) | -6 | -10 | -703 |
| Total (USDmn) | 49 | -894 | -20314 |
| * Data Up To Oct 13 |
Source: Bloomberg Finance L.P./MNI
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US STOCKS: S&P(ESZ5) - Momentum Higher Stalls Above 6650 For Now
The S&P(ESZ5) Friday night range was 6631.25 - 6662.75, SPX closed -0.05%, Asia is currently trading around 6644. The S&P traded sideways as the market turned its focus towards the FOMC this week and what the potential upcoming cutting cycle could look like. This morning US futures have opened slightly lower, E-minis -0.05%, NQU5 -0.05%. The stock market continues to look overdone and is in what is supposed to be a difficult seasonal period, but it remains in an uptrend and there does not look to be any imminent signs of a correction yet as it continues to grind higher, dragging an underweight institutional market back in.
- (Bloomberg) - Very little seems to dent the enthusiasm of equity investors, despite a minor pullback late Friday. Renewed enthusiasm for the AI narrative following Oracle’s blowout forecasts and optimistic conference call.
- The Real Fly on X: “The Fed has cut rates 12 times when the S&P 500 was within 1% of its all-time high. The market was higher one year later all 12 times (with a median return of 15%). JP MORGAN.”
- RenMac on X: “Fed Should Go 50… But Likely Won’t – Neil Dutta”
- Lance Roberts on X: "No recession is expected, but margin data and weakening payrolls suggest more risk than consensus assumes. While CPI grabs headlines, it lags the real signals of slowing margins and softer jobs. Markets are pricing in easier monetary policy rather than true resilience, leaving room for policy mistakes — especially if tariffs act as a tax on growth. Rate cuts are possible, but the scale depends on payroll trends, and the White House’s push to steer outcomes away from the Fed adds both opportunity and responsibility." - (Steve Blitz, TS Lombard)
- The Kobeissi Letter on X: “The historic run continues: The S&P 500 is now up +31% over the last 5 months, the most since the 2020 pandemic recovery. This marks the third-biggest 5-month gain over the last 20 years. This is only 1 percentage point behind the post-2008 Financial Crisis recovery of +32%.”
Fig 1: SPX(ESZ5) Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
ASIA STOCKS: South Korea Records Best Inflow Day Since Mid 2024, As Kospi Surges
Friday delivered strong inflows for both South Korea and Taiwan. South Korea saw over $1.1bn in net inflows, which was the strongest inflow day since mid-June last year. It also bought the 5-day sum of net inflows to over $3bn. The Kospi has surged to fresh record highs, pushing through the 3400 level in the first part of trade today. Onshore media is reporting that the government won't go through with plans to lower the threshold for stock capital gains (with original plans being this would be lowered to 1bn won form the current 5bn won). Such a step was suggested by President Lee last week, so today's outcome is unlikely to surprise the market much.
- For Taiwan, the 5-day sum of net inflows remained very elevated last week at +$5.6bn. Broader tech sentiment rallied last week, while the onshore Taiex index is just off record highs. Chip/AI demand sentiment remains firm.
- Elsewhere, outflow momentum from Indonesia slowed to nearly flat on Friday. Still, we had decent outflows the week of just over $400mn. This week we have the BI decision, where no change is expected. It will be a focus point though given the new FinMin has a strong pro-growth stance.
- The see-saw nature of Indian flows continued, while other markets saw little net aggregate shifts in terms of flows.
Table 1: Asian Markets Net Equity Flows
| Yesterday | Past 5 Trading Days | 2025 To Date | |
| South Korea (USDmn) | 1165 | 3034 | -2299 |
| Taiwan (USDmn) | 910 | 5606 | 7405 |
| India (USDmn)* | -387 | 188 | -15524 |
| Indonesia (USDmn) | -2 | -401 | -3728 |
| Thailand (USDmn) | -24 | -66 | -2552 |
| Malaysia (USDmn)* | 25 | -2 | -3808 |
| Philippines (USDmn) | 5 | -3 | -727 |
| Total (USDmn) | 1693 | 8357 | -21233 |
| * Data Up To Sep 11 |
Source: Bloomberg Finance L.P./MNI
GOLD: Gold Higher Last Week As Fed Widely Expected To Cut On September 17
Gold prices finished Friday slightly higher at $3643.14/oz after a high of $3656.65 to be up 1.6% last week and 5.7% this month. Tuesday saw a new record of $3674.27 supported by the market fully pricing in a 25bp Fed cut for September 17 with close to 75bp by year end. Bullion has started today around $3637.2. The USD index and US yields were slightly higher.
- Preliminary September Uni of Michigan consumer sentiment and expectations moderated to their lowest since May. 1-year inflation expectations were stable but 5-year rose 0.4pp to 3.9%.
- Bloomberg data show that demand from ETFs has increased substantially adding to upward pressure on prices. It also reported that UBS lifted its price forecast for gold to $300 to $3800/oz by year end due to ETF purchases, lower rates and greenback.
- Silver outperformed last week rising 2.9% after increasing 1.5% to $42.187 on Friday. It is now 6.2% higher in September. The metal is currently around $42.19 off today’s low of $42.07.
- Equities were little changed on Friday with the S&P slightly lower and Euro stoxx up 0.1%. The S&P e-mini has started today flat. Oil prices were higher with Brent +0.8% to $66.88/bbl. Copper was down 0.2%.
