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StreetAccount Summary - Asian Market Recap: Nikkei (0.31%), Hang Seng +0.31%, Shanghai Composite +0.18% as of 03:10 ET

Jan 17 ,2025

• Synopsis:

  • Asian equities ended mixed in quiet trading Friday. A modestly positive response in Greater China to economic data that leant favorable with the main benchmarks ending higher. Small gains for Taiwan and Singapore to cap a positive week, Southeast Asia recovered slightly from early week losses. Japan's Nikkei and Topix both lower but off their troughs; the ASX and Kospi a few points down. US futures higher, Europe seeing strong gains in early trades. Dollar unchanged, yen volatile ahead of BOJ decision next week, quiet elsewhere. Treasury yields higher across tenors. Crude prices higher, precious metals down, industrial metals higher on China data. Cryptocurrencies higher with bitcoin consolidating above $100K.

  • The main economic point of the week came and went with a whimper as China Q4 GDP and monthly activity data came in a smidge above expectations on balance but analysts were quick to point out growth was becoming increasingly unbalanced as industrial output joined exports in beating forecasts, while consumer activity remains downbeat and house prices continue to decline. Equities, the yuan and CGBs relatively quiet with investors now bracing for tariff news that may come as soon as next week. Separate data from the NBS today showed China's population declined again last year, adding to long-term economic pressure.

  • Elsewhere, more economists anticipating a BOJ rate hike next week amid growing confidence on inflation and wages. Yen now at one-month high against dollar while sharp rise in JGB yields over January has narrowed spread to Treasuries. Singapore non-oil exports rose by the most in four months amid strong electronics shipments. Malaysia's Q4 GDP growth came in at the low end of market expectations but the government is confident of maintaining growth in 2025.

  • Nintendo (7974.JP) said it will release its Switch 2 console sometime this year with more details to be published in April. China's Economic Observer newspaper said China Vanke's (22.02.HK) CEO had been arrested by police after a task force arrived in Shenzhen to oversee the company's operations; shares down sharply. Rio Tinto (RIO.AU) and Glencore have discussed merger in what could be largest ever mining deal, according to a Bloomberg report. CC Capital has raised its offer price to A$4.60 per share for Insignia Financial (IFL.AU) to top Bain's offer.

• Digest:

  • China Q4 GDP beats but focus turns to looming tariffs:

    • China GDP expanded 5.4% y/y in Q4, above consensus 5.0% and follows 4.6% in the prior quarter. Sequential growth was in line at 1.6% q/q, strengthening from 0.6% in Q3. Results left 2024 growth at 5.0% vs consensus 4.9%, matching the government target of around 5%. Underlying activity data on the firm side of expectations. Industrial production rose 6.2% in December, above consensus 5.4%. Follows 5.4% in November, marking the strongest since April. Autos, PCs, solar cells and steel were positive, while smartphones fell moderately. Capacity utilization improved sequentially for the third straight quarter from its recent Q1 trough to 76.2%, a three-year high. Retail sales increased 3.7%, just above consensus 3.6%, following 3.0% in November. Growth still led mainly by surging appliances driven by the government trade-in program. Autos marginally higher. Fixed asset investment finished up 3.2% for the year, marginally below consensus and Jan-Nov aggregate of 3.3%. Infrastructure growth picked up to 4.4% from 4.2%, while real estate declines deepened further to 10.6% from 10.4%. Details contrasted with moderating weakness in housing sales and funding. Unemployment rate was 5.1%, just above consensus and prior month's 5.0%.

  • China new home prices flat for first time since June-2023:

    • New home prices in China were flat m/m in December based on Reuters calculations of NBS data, after 0.1% dip in November. Prices were steady for first time since June-2023 after 17 months of declines. New home prices were down 5.3% y/y, after 5.7% drop in previous month. NBS said top-tier cities witnessed better price recoveries with new home prices gaining 0.2% m/m while second-home prices rose 0.3% m/m. 23 out of 70 cities monitored by NBS reported m/m price increases in new home prices, 6 more than in November while nine cities reported m/m increases in second-home prices, one down from previous month. Bloomberg noted decline in home prices abated for fourth month in December, showing signs of stabilization after Beijing's stimulus push in late 2024. NBS data largely corroborated private survey done by China Index Academy. Meanwhile analysts cautioned broader property market recovery still faces growing challenges in 2025 despite some improvement in sentiment.

  • China launches dumping probe on US chip imports, flags expansion of dual-use list:

    • China Commerce Ministry announced an investigation into domestic chip sector claims that US is dumping legacy chips enabled by the Chips Act. Bloomberg described the move as a response to latest US AI chip controls. Statement did not name any company, though article noted several US firms including Texas Instruments (TXN) and Analog Services (ADI) among market leaders in lower-end products which are ubiquitous in devices from cars to appliances. Customs data showed China imported $385.6B in integrated circuits in 2024, mostly comprising older-generation chips. Probe forms mutual protest against government subsidization. Story said consequences unclear for companies found to be violating antitrust or anti-dumping rules. Drawing on precedents, suggested Beijing could impose higher or targeted tariffs and has threatened product bans or fines. China ministry also signaled plans to add more products to its dual-use list "in due course" (Xinhua), portending more restrictions on critical minerals though did not elaborate. Recall that developments extend a series of sanction-related activity, expanding respective blacklists and export controls. Market attention remains fixed on how tariff policies play out.

  • Nintendo sells off after Switch 2 unveil:

    • Nintendo (7974.JP) closed 4.26% lower Friday after selling off 7% earlier in reaction to the Switch 2 console unveiling. Nikkei noted shares came off record highs in the lead-up to the announcement and cited thoughts that Nintendo was compelled to provide official information amid a flurry of speculation and unofficial mockups, creating a typical buy-on-rumor, sell-the-fact scenario. Also some disappointment at the lack of surprises (Bloomberg) and upgrade seen incremental along the lines of Sony's PS5 Pro rather than a complete redesign (Reuters). Yet, broader sentiment was upbeat on prospects that new hardware will reinvigorate sales, though predicated on new software titles. Presentation video showcased aesthetics and some features ahead of its launch in 2025. No details on price or the release date but said it will hold an online presentation on 2-Apr to reveal more information (Nikkei). The built-in touch screen appears to be larger than the current Switch's viewing surface, but no specifications were disclosed. The video showed console running an apparently new Mario Kart game, raising speculation on social media that it will be launched soon.

  • Stronger consensus for BOJ rate hike next week:

    • Bloomberg survey (n=53) found some 74% of economists forecast a BOJ rate hike next week, up from 52%, while 23% picking March. Expectations largely shaped by latest comments from Governor Ueda and Deputy Governor Himino signaling a move will be discussed. Article noted many also echoed an earlier report indicating expectations for BOJ to proceed unless Trump shocks markets. Almost half of respondents saw Trump unlikely to dampen the global economic outlook or destabilize financial markets before the BOJ meeting, outnumbering a about a quarter that viewed such negative impacts as likely. On wage hikes, 78% said there is sufficient momentum for spring wage negotiations to proceed with a rate hike. Likelihood also supported by recent yen weakness. Results compare with an earlier Reuters survey, where 20 out of 32 looked for a move next week, while remainder opted for March. Rationale was largely the same, though wage hikes estimated to be somewhat softer than last year.

  • Notable Gainers:

    • +15.0% 010120.KS (LS Electric): reportedly to supply power equipment for data centers to xAI

    • +9.6% 2285.HK (Chervon Holdings): expects FY net profit $110-120M vs net loss of ($37.2M) in FY23, representing growth of around +400%

    • +4.9% 028050.KS (Samsung E&A Co.): reports Q4 results ahead of FactSet estimates

    • +1.6% 590.HK (Luk Fook Holdings (International)): reports Q3 retail same store sales results

    • +1.4% 2330.TT (Taiwan Semiconductor): Q4 results beat while guidance shows sign of resilient AI spending

  • Notable Decliners:

    • -6.1% 8804.JP (Tokyo Tatemono): unveils FY25-27 business plan; UBS downgrades to neutral from buy citing lack of additional catalysts

    • -5.6% 500209.IN (Infosys): reports better-than-expected Q3 results; shares fall despite earnings beat

    • -4.3% 7974.JP (Nintendo): reveals first look at Switch 2, a Direct presentation is scheduled for 2-Apr with the console to go on sale in 2025

    • -3.3% 2202.HK (China Vanke): according to now-deleted reports, CEO Zhu Jiusheng has been taken away by the police, and a working group from the Shenzhen government is taking over the management of the company

    • -0.7% RIO.AU (Rio Tinto): reportedly held talks about potential combination with Glencore

• Data:

  • Economic:

    • China

      • December industrial production +6.2% y/y vs consensus +5.4% and +5.4% in prior month

        • Retail sales +3.7% y/y vs consensus +3.6% and +3.0% in prior month

        • Fixed asset investment (YTD) +3.2% y/y vs consensus +3.3% and +3.3% in prior month

        • Unemployment rate 5.1% vs consensus 5.0% and 5.0% in prior month

      • December new house prices 0.0% m/m vs (0.1%) in prior month (Reuters)

    • Singapore

      • December non-oil exports +9.0 y/y vs consensus +7.8% and +3.4% in prior month

        • Non-oil exports (1.7%) m/m vs consensus (1.2%) and (14.7%) in prior month

  • Markets:

    • Nikkei: (121.14) or (0.31%) to 38451.46

    • Hang Seng: 61.17 or +0.31% to 19584.06

    • Shanghai Composite: 5.79 or +0.18% to 3241.82

    • Shenzhen Composite: 6.74 or +0.35% to 1916.19

    • ASX200: (16.60) or (0.20%) to 8310.40

    • KOSPI: (3.94) or (0.16%) to 2523.55

    • SENSEX: (493.48) or (0.64%) to 76549.34

  • Currencies:

    • $-¥: +0.30 or +0.20% to 155.4590

    • $-KRW: (0.69) or (0.05%) to 1457.3500

    • A$-$: (0.00) or (0.06%) to 0.6208

    • $-INR: +0.01 or +0.01% to 86.6151

    • $-CNY: (0.00) or (0.07%) to 7.3273