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StreetAccount Summary - Asian Market Recap: Nikkei +1.70%, Hang Seng +0.28%, Shanghai Composite (0.12%) as of 03:10 ET

Mar 03 ,2025

• Synopsis:

  • Asia equities ended mostly higher Monday. Strong gains for Japan's main boards that bounced off multi-month lows seen on Friday. Greater China benchmarks turned mixed after a bright start but stayed mostly higher. Australia higher, Indonesia the region's leader on welcome PMI and inflation data, which showed prices contracting for the first time in 24 years. Taiwan lower as it marks-to-market following Friday's holiday. India a few points lower. South Korea closed for a holiday. US futures point to a higher open, Europe opened with gains. US dollar dipping as euro advances, yen strengthening on hawkish BOJ comments. Treasuries mixed, Asia sovereigns quiet. Crude, precious metals higher, base metals mixed as copper nudges higher but iron ore down sharply. Many cryptocurrencies higher but many off their peaks.

  • Developed Asia markets following through from Wall Street's positive end to Friday and bounced nicely off some recent lows, with positive monthly PMI data also supportive. A modest risk-on feel to the session as cryptocurrencies also bounced on Trump's comments over creating a crypto strategic reserve despite doubts among some industry players that it was possible without Congressional approval. Tariffs remain top of mind with Trump expected to finalize a tariff level for Canada and Mexico before Tuesday while the Global Times reported Beijing was considering countermeasures against US tariffs, possibly focusing on US farm products. Later this week, China's National People's Congress meets many expecting the government work report to set an economic target of "around 5%" again, with any mention of fresh fiscal policy to be closely watched.

  • February manufacturing PMIs showed growth almost everywhere except for Japan, which remained in contraction as overseas and domestic demand remained weak. China Caixin's PMI rose by more than forecast as new orders and output expanded, and Taiwan's index rose also on output and new order strength while its business sentiment sub component rose to an eight-month high. Indonesia's reading was the sharpest improvement in nine months while the rest of ASEAN also improved. India's reading showed the slowest expansion in more than a year.

  • Softbank (9984.JP) is said to be in discussion over loans to fund $16B in AI funding, according to press reports. Baidu (9888.HK) is planning to raise CNY 10B ($1.4B) from the sale of offshore yuan bonds, vastly greater than CNY4B program initially suggested. New World Development (0017.HK) said it would increase cash flow and cut debt through active property sales, and lowering capital expenditure. MIXUE Group (2907.HK) shares debuted on the Hang Seng and rose almost 45% in its first day of trading. Star Entertainment (SGR.AU) suspended from trading after failing to post its half yearly results to December due to the lack of a financial rescue package. City Developments (C09.SP) resumed trading following reports last week its chairman had filed a lawsuit against his own son and six other board members alleging lapses of corporate governance.

• Digest:

  • China mulling countermeasures against additional 10% US tariff, likely targeting US farm products:

    • Global Times, citing an unnamed source, reported China is examining countermeasures in response to US threats of an additional 10% tariff. Retaliation said to likely come in the form of both tariffs and non-tariff measures targeting US agricultural and food products. Source was quoted as warning, "China will definitely carry our strong, powerful countermeasures" should US follow through with its tariff threat. Article recounted consistent official policy rhetoric insisting that China is tough on fentanyl as well as criticisms of bilateral tariffs. Reuters recalled state-backed Global Times was the first to report China's plans for retaliation against EU tariffs on Chinese EVs last year. Story noted Trump's announcement left Beijing with less than a week to come up with countermeasures or strike a deal. Also coincides with the start to the NPC. Analysts say Beijing still hopes to negotiate a truce with the Trump administration, but with no signs of any trade talks, the prospect of a rapprochement between the two sides is fading. China remains the biggest market for US farm products.

  • China official and Caixin manufacturing PMIs rise to three-month highs:

    • Official manufacturing PMI was 50.2 in February, above consensus 49.9. Follows brief contraction of 49.1 in the prior month, marking a three-month high. Improvement reflected stronger rebounds in production and new orders, both expanding 10-month highs, after a lull in January attributed to LNY holiday effects. Exports logged meaningful improvement, though remained well in contraction territory. Employment and finished goods inventories also continued declines. Inflation metrics showed input prices turning positive for the first time in four months while output prices fell at a slower pace. By industry size, improvement/expansion was confined to large firms, while small and medium-sized enterprises edged deeper into contraction. Nonmanufacturing PMI rose to 50.4, matching expectations, from 50.2. Main driver was a sharper rebound in construction as services growth slowed for the second straight month to the neutral level. NBS highlighted particular strength in civil engineering construction, indicating accelerated infrastructure activity after the holidays. Aggregate new orders and employment logged faster declines. Input prices turned negative for the first time in three months as output prices fell at the strongest pace since September. Composite PMI rose to 51.1 from 50.1. Caixin manufacturing PMI similarly posted a three-month high 50.8 above consensus 50.3, following prior 50.1. Main drivers were also output and new orders.

  • China consumer stocks back in favor as Mixue jumps in Hong Kong trading debut:

    • Consumer discretionary stocks within Hang Seng Composite Index have risen 22.5%YTD, outperforming 14% gain in Hang Seng Index. On Monday, bubble-tea chain Mixue (2097.HK) surged in Hong Kong trading debut after retail investors rushed to its HK$3.45B ($444M) IPO, biggest since 2021 in the city. Stock jumped more than 40% after being sold at HK$202.5 per share while SCMP noted IPO attracted record HK$1.8T of orders from retail investors before trading. Bloomberg reported Mixue's sought-after stock helps fuel optimism over rebound in Hong Kong's IPO market, seen to double in 2025. Other consumer stocks making a comeback including jewelry maker Laopu Gold (6181.HK) up more than 114% YTD, cosmetics producer Mao Geping (1318.HK) up 37% and toymaker Pop Mart (9992.HK) nearly 23% higher as analysts noted consumer companies with solid fundamentals and sector tailwinds gaining retail investor' favor amid DeepSeek-fueled valuation upgrade. Attention turns to signs of further economic stimulus to boost domestic demand in upcoming NPC session for consumer stocks to gain more legs.

  • Deadline for Trump's Canada and Mexico tariffs nears:

    • Markets remain attuned to trade developments with President Trump's Canada and Mexico tariffs slated to take effect on Tuesday after he blamed them for insufficient efforts to curb flow of fentanyl into US (Bloomberg). On Sunday Commerce Secretary Lutnick said Trump yet to settle on final tariff rate, suggesting doubts whether full 25% will be applied on those countries as Trump has threatened (Reuters). Analysts not discounting possibility of Trump announcing another last-minute delay contingent on updated border promises and other concessions from Canada and Mexico. Last week Mexico turned over top drug traffickers and criminals to US in hope of staving off tariffs for a little longer. Treasury Secretary Bessent also encouraged Canada to match Mexico in impose tariffs on China as a way to fortify North America against flood of Chinese imports (Reuters). Meanwhile, markets awaiting how/whether China retaliates after Trump said he would double 10% tariff rate imposed early February to 20%. Global Times sources said China may target US agriculture and food products as part of tariff and non-tariff countermeasures.

  • Asia-ex manufacturing output improves as new orders, demand recover from January blip:

    • Asia (ex Japan and China) February manufacturing PMIs improved everywhere with noticeable regional expansion in new orders and output. Taiwan's PMI reading expanded as productivity, output, and new orders all rose in broad improvement; outlook positive with business confidence at eight-month high; final reading rose to 51.5 from 51.1. Indonesia saw improvement due to sharpest expansion in production in nine months, rise in new orders, higher employment; business sentiment at highest in three years. Final PMI at 11-month high 53.6 from prior 51.9. Thailand manufacturing sector returned to expansion as new orders, employment remained stable, backlogs increased; final reading at expansive 50.6 from 49.6. Malaysia's index improved in part to new orders component rising for first time in four months; final reading at 11-month high 49.7. Some backtracking in Vietnam with demand struggling for positive momentum, index at contractive 49.2. South Korea's PMI report due Tuesday.

  • Notable Gainers:

    • +43.2% 2097.HK (MIXUE Group): debuts +29.4% at HK$262/share on HKEx

    • +20.2% 8905.JP (AEON Mall): AEON Co. to make AEON Mall a wholly owned subsidiary via share exchange to improve management efficiency

    • +17.2% 6707.JP (Sanken Electric): ON Semiconductor reportedly considering takeover bid for Allegro MicroSystems

    • +11.2% 17.HK (New World Development): aims to lower FY25 capex to less than HK$13B

    • +6.9% 6098.JP (Recruit): to launch up to 52.0M-share buyback for up to ¥450.0B

    • +3.5% 1913.HK (Prada): reportedly nearing agreement to acquire Versace from Capri Holdings for approximately €1.5B

    • +2.4% 3382.JP (Seven & i): president Ryuichi Isaka reportedly to resign; director Stephen Hayes Dacus to be appointed replacement

    • +1.9% 9868.HK (XPeng, Inc.): February deliveries 30,453 vehicles, +570% y/y

  • Notable Decliners:

    • -10.2% 763.HK (ZTE): reports FY earnings with headline figures below FactSet estimates

    • -5.7% 7163.JP (SBI Sumishin Net Bank): NTT Docomo reportedly abandons takeover talks for SBI Sumishin Net Bank

    • -4.4% 8046.TT (Nan Ya Printed Circuit Board): reports FY results with revenue and EBIT below FactSet estimates

    • -3.1% C09.SP (City Developments): trading resumes following disclosure of a disagreement within the board regarding its composition and the structure of its committees

• Data:

  • Economic:

    • China February

      • Official manufacturing PMI 50.2 vs consensus 49.9 and 49.1 in prior month

        • Non-manufacturing PMI 50.4 vs consensus 50.4 and 50.2 in prior month

        • Composite PMI 51.1 vs 50.1 in prior month

      • Caixin manufacturing PMI 50.8 vs consensus 50.3 and 50.1 in prior month

    • Japan February

      • Final manufacturing PMI 49.0 vs preliminary 48.9 and 48.7 in prior month

    • Australia

      • Q4 business inventories +0.1% vs consensus 0.0% and (0.9%) in Q3

        • Q4 company profits +5.9% vs consensus +1.8% and (4.6%) in Q3

      • February ANZ-Indeed job advertisements (1.4%) m/m vs +0.2% in January

  • Markets:

    • Nikkei: 629.97 or +1.70% to 37785.47

    • Hang Seng: 64.95 or +0.28% to 23006.27

    • Shanghai Composite: (3.97) or (0.12%) to 3316.93

    • Shenzhen Composite: 6.72 or +0.33% to 2031.97

    • ASX200: 73.30 or +0.90% to 8245.70

    • KOSPI: Closed

    • SENSEX: (15.92) or (0.02%) to 73182.18

  • Currencies:

    • $-¥: (0.40) or (0.27%) to 150.2200

    • $-KRW: (2.10) or (0.14%) to 1459.7050

    • A$-$: +0.00 or +0.11% to 0.6217

    • $-INR: (0.10) or (0.12%) to 87.3712

    • $-CNY: +0.01 or +0.10% to 7.2911