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StreetAccount Summary - Asian Market Recap: Nikkei +1.28%, Hang Seng (0.20%), Shanghai Composite (0.42%) as of 03:10 ET

Feb 13 ,2025

• Synopsis:

  • Asian equities mixed Thursday. Hang Seng gave up intraday gains to end lower after tech index at one point hit a three-year high. Mainland benchmarks also wobbled in choppy trading. Korea and Japan outperformed. Taiwan and Australia slightly higher. India trading higher after six consecutive sessions of losses. US futures flat. Treasury yields edged down after jumping on Wednesday. Dollar weaker versus all other majors. Crude extending overnight sell-off amid Trump push to end Ukraine war. Gold and copper stronger. Bitcoin is down.

  • Hotter-than-expected US January CPI added to signs disinflation momentum has stalled. Fed Chair Powell said data shows more work to do on inflation and need to keep policy restrictive for now. Comes at a time of heightened concerns about upside risks to inflation from Trump tariffs. In response, markets pushed out expected Fed rate cut to December from September, consistent with economist views of an extended pause. Markets are also on watch for President Trump's announcement on reciprocal tariffs after he said order is coming soon.

  • In Asia trading, some support was attributed to President Trump's move to negotiate an end to Ukraine war following his phone calls with Putin and Zelensky. Possibility that Trump may pause some of the tariffs he has announced also seen with some cautious optimism. India PM Modi set to meet with Trump in White House Thursday while New Delhi among those with greatest tariff differentials. Elsewhere Japan's wholesale inflation in January jumped to seven-month high. Economists surveyed by Bloomberg trimmed South Korea's economy growth forecast for 2025. India CPI inflation in January eased to five-month low. Philippine central bank kept policy rate on hold in surprise move amid growing macroeconomic risks.

  • In corporate developments, Honda (7267.JP) and Nissan (7201.JP) officially terminated merger talks, putting pressure on the latter to seek other partnerships. PE firms reportedly competing to acquire Trend Micro (4704.JP). Baidu (9888.HK) said it will make Ernie AI model for free starting in April as it hopes to regain momentum in AI race. Enlight Media (300251.CH) shares more than doubled MTD as box office from its movie "Ne Zha 2" now among top 20 of all-time globally.

• Digest:

  • Trump says reciprocal tariffs coming soon:

    • President Trump told reporters at the White House that he will impose reciprocal tariffs Wednesday evening or tomorrow morning (Reuters). India could be in the firing line ahead of a scheduled White House visit by Prime Minister Modi Thursday. EU officials said earlier they will prioritize negotiations over retaliation to avoid a trade war. Some discussion about implementation difficulties; BDO International noted 186 member nations of World Customs Organization all had different tariff rates, describing the task as "almost an AI project." Uncertainty over possible carve-outs continues as Republican House Speaker Johnson said he believed Trump is considering exemptions including for autos and pharmas, though noted he was not certain. Follows exemption requests from Australia (clouded by recent remarks from trade adviser Navarro) and Japan after the announcement of universal levies on steel and aluminum imports confirmed to commence 12-Mar. South Korea also seeking talks with US (Reuters) though some thoughts that implications may be limited given effective tariff rates on US have been largely eliminated after prior deals (Reuters).

  • Trump seeks to negotiate end to Russia's war in Ukraine:

    • President Trump renewing efforts end to Russia's war in Ukraine after speaking with Presidents Putin and Zelensky on Wednesday (NY Times, Reuters, Washington Post). Trump said both leaders want peace, praising Putin and eyeing a meeting with him in Saudi Arabia (Politico). Said Vice President Vance and Secretary of State Rubio will lead US delegation in a meeting set up for Friday at Munich, adding he is hopeful outcome will be positive. Trump said unlikely Ukraine will return to pre-2014 borders, though alluded to a return of some territory captured by Russian forces. In Guardian interview this week Zelensky offered territory swap deal with Russia (Ukraine has also captured Russia's Kursk region). Trump concurred with Defense Secretary Hegseth that Ukraine unlikely to join NATO as part of any peace deal (Reuters). Hegseth earlier urged EU countries to take greater ownership of their defense and ruled out US troops being deployed to Ukraine as part of any security guarantee. However, US may strengthen economic commitment to Ukraine with Treasury Secretary Bessent couching it as a long-term security shield (Politico). Recall Trump is eyeing US access to Ukraine's rare earths minerals in return for aid.

  • Hang Seng Tech falls after intraday price hit three-year high:

    • Hang Seng Tech Index fell on Thursday, likely due to profit-booking, after intraday price hit strongest level since February 2022 as traders rushed into Chinese tech names driven by DeepSeek enthusiasm (Bloomberg). Added emergence of DeepSeek has fueled hunt for possible service and application beneficiaries from China's progress in LLMs and led to reassessment of Chinese assets while Hang Sang Tech forward P/E currently trading 17.4X, remaining below five-year average of 25X. Bloomberg noted Alibaba (9988.HK) shares have surged 46% since 13-Jan low, expanding its market cap by nearly $87B through Wednesday close and making it best performer among China's big tech companies. Other notable gainers included Kingdee International (268.HK) up 37.0% MTD, BYD Electric (285.HK) +32.0%. Notably Baidu (9888.HK) jumped by more than 5.5% Thursday after announcing it will make its Ernie AI model free for users starting April, move that could help company regain momentum in AI race (Bloomberg).

  • Japan CGPI accelerates amid surging rice prices:

    • CGPI rose 4.2% y/y in January, above consensus 4.0%. Follows revised 3.9% in the prior month, marking the highest since Jun-23. Yen weakness was a moderate factor with yen-denominated import prices up 2.3%, though well below prior peaks. Moreover, underlying contract-currency based prices have fallen for a fifth straight month, notably contrasting with the post-pandemic surge through 2022. Attention has shifted to surging rice prices, seen as the main driver behind the 36.2% growth in agricultural products. This factor has widened the separation between headline and core CPI inflation, prompting some parliamentary scrutiny toward BOJ's focus on core and underlying measures (Reuters). Governor Ueda acknowledged prices of fresh foods and other common purchases are rising by more than 2% and "negatively impacting people's lives." Added such increases won't necessarily be temporary with the possibility of affecting inflation expectations. For now, BOJ maintains the view that such pressures reflect cost-push dynamic and likely to dissipate toward mid-year.

  • South Korea GDP consensus forecasts shaved:

    • Bloomberg consensus (n=39) looks for 2025 GDP growth of 1.6%, down from 1.8% in the prior survey. Aligns more with a recent Reuters poll showing an average forecast of 1.4%. Follows BOK's revision last month to 1.6%-1.7% from 1.9% reflecting export weakness, stagnant consumption and political turmoil. While the Reuters panel unanimously predicted BOK to resume rate cuts in February following a surprise on-hold decision last month, Bloomberg suggested the certainty level has declined after Governor Rhee in an interview last week push back against mounting speculation, deflecting some of the onus for stimulus on fiscal policy, and cautioned the outcome is not inevitable. According to Reuters, acting President Choi on Wednesday said he hope for a swift agreement on an extra budget in response to opposition Democratic Party's proposal for at least KRW30T ($20.7B). Added the government would respond preemptively to any domestic impact from US tariffs with corporate sector support and efforts to diversify export markets.

  • Notable Gainers:

    • +16.1% 4704.JP (Trend Micro): PE firms reportedly competing for Trend Micro

    • +14.1% 5838.JP (Rakuten Bank): reports Q3 earnings and raises FY guidance

    • +9.9% 6415.TT (Silergy): Morgan Stanley upgrades to overweight from equal-weight citing factors including signals of cyclical recovery

    • +5.2% 005380.KS (Hyundai Motor): House Speaker Johnson says White House considering exemptions to reciprocal tariffs, including autos

    • +0.7% 3034.TT (Novatek Microelectronics): reports Q4 earnings with EPS and revenue ahead of FactSet estimates

  • Notable Decliners:

    • -8.3% 9843.JP (Nitori Holdings): reports 9M results; analysts broadly highlight Q3 results missed consensus expectations with many attributing weaker profits to low gross margin

    • -4.6% 6098.JP (Recruit): reports Q3 revenue below StreetAccount estimates; updates FY guidance

    • -4.3% 035720.KS (Kakao): reports Q4 operating profit and revenue below StreetAccount estimates

    • -3.6% 9984.JP (SoftBank Group): SoftBank Group reports Q3 net income attributable (¥369.17B) vs year-ago ¥950.00B

    • -1.4% 2382.HK (Sunny Optical Technology (Group)): guides FY net income attributable CNY2.64-2.75B vs FactSet CNY2.47B

    • -0.9% 2330.TT (Taiwan Semiconductor): trading lower amid circulation of comments regarding its involvement in Intel's foundry potential spinoff

• Data:

  • Economic:

    • Japan January CGPI +4.2% y/y vs consensus +4.0% and revised +3.9% in prior month

  • Markets:

    • Nikkei: 497.77 or +1.28% to 39461.47

    • Hang Seng: (43.55) or (0.20%) to 21814.37

    • Shanghai Composite: (13.90) or (0.42%) to 3332.48

    • Shenzhen Composite: (15.73) or (0.77%) to 2018.24

    • ASX200: 4.70 or +0.06% to 8540.00

    • KOSPI: 34.78 or +1.36% to 2583.17

    • SENSEX: 355.25 or +0.47% to 76526.33

  • Currencies:

    • $-¥: (0.13) or (0.08%) to 154.2930

    • $-KRW: (1.76) or (0.12%) to 1449.9800

    • A$-$: (0.00) or (0.10%) to 0.6274

    • $-INR: (0.09) or (0.10%) to 86.8921

    • $-CNY: (0.02) or (0.22%) to 7.2929