Back to Daily DR Market Summary

StreetAccount Summary - Asian Market Recap: Nikkei (0.79%), Hang Seng +3.69%, Shanghai Composite +0.43% as of 03:10 ET

Feb 14 ,2025

• Synopsis:

  • Asian equities mixed Friday. Hang Seng supercharged by Chinese tech stocks to come near October high, mainland China also gained with Shenzhen outperforming Shanghai. Korea and Australia logged mild gains. Taiwan was the worst performer while Japan weaker too. India extending recent losses. US futures flat. Treasury yields flat in Asian hours after earlier bull flattening. DXY edged down, yen rebounded. Crude and gold higher.

  • Trump unveiled widely anticipated plan on reciprocal tariffs though absence of details and delayed implementation spun as positives though risk of wide-ranging trade war still exists. Implementation delay until April viewed as a signal there is room for negotiations and Trump said tariffs can be avoided if other countries drop theirs. While announcement was welcomed by markets, Trump also said not to expect exemptions, and he reiterated plans to impose additive tariffs on autos, pharma and chips. Trump also met with India PM Modi at White House Thursday, where India said it would work with US on concluding a mutually beneficial trade agreement as New Delhi will boost energy purchases from US and buy American fighter jets.

  • In Asia, Hang Seng tech index extending bull run, surpassing October high to hit new three-year peak supercharged by AI frenzy. PBOC signaled potential policy adjustments given economic challenges home and abroad and vowed to keep supporting yuan. Singapore's economy ended 2024 on stronger note than initially expected with annual growth hitting three-year high. Malaysia's economy also grew faster than expected in Q4 with full-year growth at 5.1%, in line with advance estimates.

  • In corporate developments, Alibaba (9988.HK) hit three-year high after confirming it will provide AI technology for AAPL iPhones in China. Baidu (9888.HK) will be a secondary partner for Apple handling features such as Visual Intelligence. There are also press reports that President Xi will chair a symposium as early as next Monday, which attendees include Alibaba's founder Jack Ma, Tencent's (700.HK) Pony Ma and Xiaomi's (1810.HK) Lei Jun. KKR (KKR) is in the early stages of examining investment in Nissan (7201.JP) after the merger talks with Honda (7267.JP) failed. Sony (6758.JP) shares jumped Friday after company raised profit and revenue outlook. TikTok returns to US app stores of Apple and Google.

• Digest:

  • Trump signs memo on reciprocal tariffs, though plan unlikely to be implemented until April:

    • President Trump signed an executive memorandum today to introduce a reciprocal tariff plan (Bloomberg, NY Times). Trump said that administration will consider countries that use a VAT system as a tariff, and will include provisions for other non-tariff barriers. Trump said that Commerce Secretary Lutnick will come up with equivalent numbers to those non-tariff barriers, while the president said there will also be tariffs on semis, cars, and pharmaceuticals in addition to reciprocal tariffs (recall House Speaker Johnson said yesterday could be exempted). White House also said tariffs to be imposed on country by country basis, begin with countries US has highest trade deficit with, while Trump said to not expect any exemptions or waivers. Studies on the tariffs are expected to be released on 1-Apr, and could be introduced as soon as 2-Apr, and would be evaluated in next 180 days. However, markets held up relatively well following announcement, which could signal some optimism around timeline, how harsh the ultimate plan will be, and opportunities for negotiations with other countries, which could ultimately cut or remove trade barriers.

  • India to boost purchases of US energy, acquire fighter jets, as Trump meets Modi:

    • President Trump met with India PM Modi at White House on Thursday. Ahead of their meeting sources told Bloomberg they would be discussing range of issues as part of broader efforts towards trade deal this year aimed at addressing US-India trade imbalance. At their joint press conference Trump said US to increase sales of fighter jets to India and India will import more US energy (Reuters). India had made concessional moves prior to Modi's visit, including import duty reductions that Trump acknowledged. India has also said it will accept return of Indians illegally in US. However, Trump also indicated India would not be exempt from reciprocal tariffs, citing its tariffs and high trade barriers. India considered particularly vulnerable to Trump's reciprocal tariffs. According to WTO data, India has trade-weighted average tariff rate of 12% compared to America's 2.2%. India also recorded $35.3B surplus with US last fiscal year against an overall trade deficit of $78.1B. Indian stocks have underperformed recently with Nifty 500 down 3% week-to-date, recently hitting its lowest since Jun-2024.

  • Apple working to launch AI features in China as early as May:

    • Bloomberg cited people with knowledge of the matter who said AAPL working towards launching AI features on its China iPhones as early as May. Comes amid signs of progress with Alibaba (9988.HK) to provide AI technology for China iPhones that can censor and filter output in order to comply with regulatory requirements (FT). Sources added AAPL working with Baidu (9888.HK) on handling other AI features for its China iPhones such as Visual Intelligence. Regulatory hurdles have handicapped AAPL's AI rollout in China, allowing domestic rivals to eat away at its smartphone market share. AAPL revenue in China shrunk by a larger-than-forecast 11% y/y in Q1. Engineering work also faces complications given several aspects of Apple Intelligence cannot easily be transferred to China. In addition to adding censorship functionality, China's government can direct Alibaba to ask AAPL to alter AI models if it identifies issues with how customers receive information. AAPL also needs to tap domestic partner for additional AI processing.

  • Japan to release rice reserves to curb price surge:

    • Agriculture minister Taku Eto announced at a press conference the government will release up to 210K tons of rice reserves in an unprecedented move to counter soaring prices (Kyodo, Bloomberg). Average retail price for 5 kg of rice was up 82% y/y to JPY3,688 ($24) in the week of 27-Jan. Initial tranche of 150K tons to be auctioned off in early March and delivery should start from mid-month. Subsequent rounds to be assessed based on market conditions and may be increased if necessary. Bloomberg said 210K tons equates to about 3% of official annual demand forecast. While 2024 harvest grew by 180K tons y/y to 6.79M tons, major distributors only held 210K tons at December-end. Ministry suspects wholesalers and farmers are hoarding rice in anticipation of further price hikes. Response follows relaxation of rules last month to allow the release of reserves to curb price increases as well as supplementing during poor harvests. Potential implications extend to monetary policy after BOJ Governor Ueda was questioned in parliament this week as focus on core inflation strips out fresh food prices contributing significantly to higher cost of living.

  • China short-term rates spike as liquidity tightens:

    • China seeing sharp rise in short-term rates with 1Y yield up more than 10 bp from February lows to highest level since late January. Yield curve becoming inverted at the front-end with spread between overnight repo rate and 7-day repo rate widening to as much as 41 bp, near largest in four years (Bloomberg). Funding conditions tightening with more than CNY3T ($411B) expected to drain over remainder of February. Of this amount, CNY2.4T will be repayment of PBOC policy loans and CNY820B from local government bond issuance. PBOC has drained around CNY1.5T via OMOs since 5-Feb with strategists noting tight funding conditions aiding in yuan's relative stability against Trump's tariffs. Liquidity drains also feeding perception any RRR cut will be delayed to March following National People's Congress. Bloomberg discussed how spike in short-term rates could also upend strategy of borrowing overnight funds to buy longer-dated securities, posing risk to China's ongoing bond rally. Comes as 30Y rate fell 10 bp below overnight interbank rate this week, representing biggest discount since Dec-2013.

  • Notable Gainers:

    • +17.9% 1833.HK (Ping An Healthcare & Technology): integrates DeepSeek with its existing AI models

    • +15.5% 7911.JP (TOPPAN Holdings): reports 9M results and raises FY net income attributable guidance

    • +8.7% 6758.JP (Sony): reports Q3 revenue and operating profit ahead of StreetAccount estimates; raises FY guidance; to buy back up to 30M shares for up to ¥50B

    • +3.7% 021240.KS (COWAY Co.): reports FY revenue ahead of FactSet estimates; provides value-up plan; targets more than KRW5T revenue by FY27

    • +2.7% 012330.KS (Hyundai Mobis): to launch 1.2M-share on-market buyback, to run between 14-Feb and 13-May

    • +2.6% 7201.JP (Nissan Motor): reports Q3 earnings; officially agrees to terminate consideration of business integration with Honda Motor; outlines FY26 turnaround measures

    • +2.5% 7267.JP (Honda Motor): reports Q3 earnings and confirms FY guidance; officially agrees to terminate consideration of business integration with Nissan Motor

    • +1.1% 4755.JP (Rakuten Group): reportedly to post FY operating profit of ~¥50.0B vs year-ago (¥212.8B), revenue ~¥2.250T, +10%, y/y; company confirms results are generally as reported

  • Notable Decliners:

    • -5.7% S68.SP (Singapore Exchange): Citi downgrades to sell from buy citing valuation

    • -3% 2914.JP (Japan Tobacco): reports Q4 revenue and net income attributable below FactSet estimates

    • -2.8% 2330.TT (Taiwan Semiconductor): Trump administration reportedly looking to renegotiate US CHIPS Act awards

    • -2.5% 1347.HK (Hua Hong Semiconductor): reports Q4 earnings; Q1 guidance below FactSet estimates

    • -0.1% 3659.JP (NEXON Co.): reports FY revenue and operating income below FactSet estimates

• Data:

  • Economic

    • South Korea

      • January unemployment rate 2.9% vs FactSet consensus 3.2% and 3.7% in prior month

    • Singapore

      • Q4 final GDP +5.0% y/y vs preliminary +4.3% and revised +5.7% in prior quarter

        • GDP +0.5% q/q vs preliminary +0.1% and revised +3.0% in prior quarter

  • Markets:

    • Nikkei: (312.04) or (0.79%) to 39149.43

    • Hang Seng: 805.96 or +3.69% to 22620.33

    • Shanghai Composite: 14.24 or +0.43% to 3346.72

    • Shenzhen Composite: 15.18 or +0.75% to 2033.42

    • ASX200: 15.80 or +0.19% to 8555.80

    • KOSPI: 7.88 or +0.31% to 2591.05

    • SENSEX: (504.37) or (0.66%) to 75634.60

  • Currencies:

    • $-¥: (0.13) or (0.09%) to 152.6660

    • $-KRW: (1.81) or (0.13%) to 1438.1500

    • A$-$: +0.00 or +0.27% to 0.6334

    • $-INR: +0.22 or +0.25% to 86.8653

    • $-CNY: (0.02) or (0.29%) to 7.2687