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StreetAccount Summary - Asian Market Recap: Hang Seng (2.18%), Shanghai Composite (2.66%), Kospi (0.02%) as of 03:10 ET

Jan 02 ,2025

• Synopsis:

  • Asia equities ended mostly lower Thursday. Losses greatest in Greater China as Hong Kong and Shanghai markets fell sharply. Taiwan was also lower, South Korea's Kospi was flat. On the upside, Australia's ASX ended slightly higher, India benchmarks are currently trading higher. Southeast Asia mixed with notable losses in Thailand. Japan remained closed for a holiday. US futures higher, Europe opened with modest gains. US dollar weaker, AUD, ANZ and yen gaining, offshore yuan also strengthened a little. Treasuries mixed, CGB yields at fresh record low. Crude and precious metals stronger, industrial metals mixed. Cryptocurrencies higher.

  • Asia stocks off to a generally poor start to the year as the soft patch seen at the beginning of the week continues. Some mark-to-market leveling at play but there was still notable weakness in China's markets just as key technical support levels were breached on the CSI 300 and Hang Seng, several large-cap stocks traded ex-dividend, and Caixin's private PMI survey also missed expectations, dampening sentiment further. India's Nifty and Sensex currently trading higher after several auto stocks reported healthy December sales, hinting at consumer strength in the broader economy.

  • In macro developments, China's Caixin manufacturing PMI was softer than expected but private surveys showed new home prices rose slightly in December. South Korea exports were stronger than expected in December to complete the fastest annual export growth in three years. BOK Governor Rhee yesterday said pace of easing needs to be flexible and, while acting President Choi promised new fiscal supportive measures, the government later had to deny speculation of a special budget. Singapore Q4 GDP growth was firmer than expected.

  • Nippon Steel (5401.JP) has proposed giving the US government veto power over any potential cuts to US Steel's production capacity, as part of its effort to secure President Biden's approval for the deal. Hyundai Glovis (086280.KS) announced it had signed a KRW3.37T order for maritime transport vessels from Hyundai Motor (005380.KS). Alibaba (9988.HK) said several of its units are to sell their 78.7% stake in Sun Art Retail (6808.HK) to a private equity group Paragon Shine as it looks to focus on its core e-commerce business.

• Digest:

  • Chinese stocks selloff on first trading day of 2025:

    • Stocks in both mainland China and Hong Kong were sharply down on Thursday, kicking off 2025 trading with a worst start since 2016. CSI 300 plunged 2.9% while Shanghai Composite was down 2.7% and Shenzhen shed 3.1%.Emerging- and tech-focused ChiNext and Shanghai STAR 50 Index were each down by more than 4% before paring some losses at close. In Hong Kong, Hang Seng was 2.4% lower, while Hang Seng China Enterprises Index dropped 2.9%. Came after Chinese stocks posted first annual advance in 2024 since the pandemic. Bloomberg pointed to Caixin manufacturing PMI came below estimates and investors turning more cautious amid anticipated hike in US tariffs. Sharp fall in CSI 300 in last session of 2024, which pushed index below 60-day moving average, may also lead to some forced selling by quant funds. Fund managers pointed to more downside risks than upside for China in fund allocation for Q1 due to trade policy uncertainties, weak macro fundamentals and lull in stimulus until Beijing's annual legislative session in early March.

  • China Caixin manufacturing PMI shows factory activity slows in December:

    • Caixin manufacturing PMI was 50.5 in December, falling short of estimates of 51.7 and November's 51.5. Still reading was the second highest in H2 2024. New orders rose for third straight month, though rate of growth eased on back of softening external demand. Export orders contracted after rising at fastest pace in seven months in November. Purchasing activity rose for third straight month. Post-production inventory increased for seventh successive month. Backlog accumulation rose only at marginal level. Meanwhile manufacturing headcounts fell at softest pace in past four months. Input prices were higher but average selling prices declined for first time since September as manufacturers had absorbed higher costs to support sales. Export charges fell as well. Amid looming tariffs from Trump 2.0, business confidence eased to lowest since September due to concerns about growth and trade outlooks. Caixin reading matched NBS official one released earlier this week that showed manufacturing grew marginally for the third month, also below consensus.

  • South Korea Finance Ministry downgrades 2025 growth forecast, announces policy support measures:

    • South Korea Finance Ministry revised down its 2025 GDP growth forecast to 1.8% from 2.2%. Cited sluggish domestic demand, slowing export growth and increasing outlook uncertainty. Vowed all-out effort to achieve swift recovery of livelihood by stimulating domestic demand and broader economic activity. Measures include mobilization of KRW18T for capital investments, front-loading implementation of planned projects to a record 67% in H1 and up to 70% for KRW85T earmarked for general public livelihood. Signaled auto consumption tax reduction in H1, immediate launch of discount campaigns for agricultural products, as well as 1M accommodation vouchers for non-metropolitan areas to boost consumption and tourism. Pledged regional construction support via increased housing supply, regulation of construction costs and easing in real estate taxes. Added financial support for low-income and vulnerable groups such as younger workers. Statement concluded that conditions will be reassessed in Q1 and additional support measures will be considered if needed. While Yonhap cited the ministry saying this includes the possibility of an extra budget, newswires subsequently reported the ministry denied that aspect.

  • Private surveys show China new home prices rise slightly in December:

    • Survey by China Index Academy showed average new home prices in 100 major cities rose 0.37% m/m and 2.68% y/y, compared with rise of 0.36% m/m and 2.40% y/y in November. Meanwhile resale prices were in decline for 32nd consecutive month, dropping 0.53% m/m in December, slightly narrowing from November's 0.57% decline. Resale prices dropped 7.26% y/y. Top-tier cities fared better in resale market with Shenzhen seeing price increases in November and December, while price declines narrowed in Beijing, Shanghai and Guangzhou. Separate data from CRIC showed value of new home sales from 100 biggest property developers rose 24.2% m/m while was flat on annual term in December. Total sales in 2024 stood at CNY3.88T ($532B) and were 28.1% y/y lower, narrowing by 2.6 ppt from Jan-Nov. Caixin added land sales nationwide in 2024 dropped to lowest level in years with yearly fall of 16%, signaling persistent struggles in property market that are crippling ability of developers to expand.

  • South Korea manufacturing output and sentiment fall sharply in December; Taiwan and ASEAN expand again:

    • South Korea PMI fell sharply amid accelerated fall in output, contraction in order intake, rising cost pressures, fall in employment. Deterioration attributed to fall in domestic demand while sentiment among manufacturers pessimistic for first time since Jul-20 during pandemic. Full PMI reading at contractive 49.0 from December's 50.6. In contrast, Taiwan reading rose to 52.7 from 51.5 as new orders, output rose at accelerated pace; employment dropped as productivity rose. ASEAN manufacturing saw modest growth, as output, new orders also expanded. Indonesia at expansive 51.2 from 49.6 with sentiment also positive for coming months. Philippines at 54.3 from 53.8 as output, new orders rose to 32-month high. Malaysia saw moderation of this year's growth as PMI fell to 48.6, conditions likely to moderate in coming months, according to S&P Global economists. Vietnam also saw moderation in output to push overall reading to 49.8 from 50.8.

  • Notable Gainers:

    • +13.3% 086280.KS (Hyundai GLOVIS Co.): Signs KRW6.7T marine shipping contract

    • +6.5% 2142.HK (HBM Holdings): Intends to launch on-market share repurchase of up to HK$40M

    • +4% 13.HK (Hutchmed): Receives NDA acceptance and priority review grant from China NMPA for ORPATHYS and TAGRISSO combination

  • Notable Decliners:

    • -20.2% 6808.HK (Sun Art Retail Group): Alibaba, New Retail to sell 78.7% of Sun Art Retail Group to Paragon Shine for HK$1.55/share

    • -11.9% 327.HK (PAX Global Technology): Issues FY guidance

    • -8.3% 600104.CH (SAIC Motor): Reports December sales

• Data:

  • Economic:

    • China December

      • Caixin manufacturing PMI 50.5 vs consensus 51.7 and 51.5 in prior month

    • South Korea December

      • Trade balance $6.49B vs consensus $4.21B and $5.61B in prior month (1-Jan)

        • Exports +6.6% y/y vs consensus +4.0% and +1.4% in prior month

        • Imports +3.3% y/y vs consensus +4.6% and (2.4%) in prior month

    • Singapore Q4

      • GDP +4.3% y/y vs consensus +3.8% and +5.4% in prior quarter

        • GDP +0.1% q/q vs consensus +2.0% and +3.2% in prior quarter

    • India December

      • Final Manufacturing PMI 56.4 vs flash reading 57.4 and 56.5 in prior month

  • Markets:

    • Nikkei: Closed

    • Hang Seng: (436.63) or (2.18%) to 19623.32

    • Shanghai Composite: (89.20) or (2.66%) to 3262.56

    • Shenzhen Composite: (50.38) or (2.57%) to 1907.04

    • ASX200: 42.10 or +0.52% to 8201.20

    • KOSPI: (0.55) or (0.02%) to 2398.94

    • SENSEX: 1,231.73 or +1.57% to 79739.14

  • Currencies:

    • $-¥: (0.53) or (0.34%) to 156.6800

    • $-KRW: (11.25) or (0.76%) to 1467.0000

    • A$-$: +0.00 or +0.23% to 0.6202

    • $-INR: +0.12 or +0.14% to 85.6991

    • $-CNY: +0.00 or +0.01% to 7.2983