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StreetAccount Summary - Asian Market Recap: Nikkei +0.77%, Hang Seng +3.29%, Shanghai Composite +1.17% as of 03:10 ET

Mar 06 ,2025

• Synopsis:

  • Asia equities finished mostly higher Thursday. More strong gains for the Hang Seng, which is now up more than 6% WTD after its tech stocks surged again; mainland China benchmarks also notably higher. Gains for South Korea but Taiwan lower. Japan higher along with Southeast Asia and India; Australia ended at two-month lows. US futures lower, Europe opened with more strong gains. US dollar consolidating steep overnight losses and trading at five-month lows, yen strengthened late on. Treasury yields higher across tenors, JGB 10Y yield at near 16-year peak on read across from Bund selloff yesterday. Crude oil futures recovering some poise but Brent still below $70/bl. Precious metals lower now after trading higher earlier, industrial metals under pressure although copper prices remain elevated. Cryptocurrencies rallying.

  • A modest return of risk in Asia markets Thursday after the White House gave the US auto industry a one-month reprieve from import tariffs and Commerce Secretary Lutnick hinted specific products compliant with USMCA may also see some relief. Hong Kong's technology stocks surged again after Alibaba revealed a new AI LLM model that it said at least equaled DeepSeek's performance and a China-based research team unveiled an AI agent that it said outperformed OpenAI models. (ShanghaiSecuritiesNews). The Hang Seng Tech index ended 5.3% higher with Alibaba and JD.com closing 8.3% up each, and Kuaishou Tech 15.6% higher.

  • In other developments, Malaysia's central bank held interest rates steady as expected despite threats to its economic growth model. South Korea February inflation eased a little back toward the BOK's target rate, with BOK saying prices likely to hover around its 2.0% target for some time. Australia exports rose to hit an 11-month peak while its trade surplus improved.

  • Hino Motors (7205.JP) and Mitsubishi Fuso are reported to be ready to restart merger talks. Bain Capital is to acquire Seven & i's (3382.JP) supermarket business for more than ¥814.7B ($5.4B); company announced CEO change and plans to list its Seven-Eleven business in the US. Alibaba (9988.HK) open-sourced its LLM that it says achieves performance comparable to DeepSeek-R1; share price surged.

• Digest:

  • China NPC ignites tech rally as Alibaba unveils rival to DeepSeek's R1:

    • Hang Seng tech stocks emerging as big winners from China government work report (GWR) with sector up ~9% week-to-date. Government seen to have delivered on market expectations for stronger signals of support on Wednesday, with particular focus on ramping up support for R&D, speeding up digitization and investment in high-tech manufacturing, and promoting adoption of LLMs to aid in healthy development of platform economy. GWR's increased focus on technology viewed as latest sign that President Xi's newfound embrace of the sector will translate to tangible support. Thursday's other main driver coming from Alibaba (9988.HK) after group unveiled new version of its open-source QwQ-32B model that uses just ~5% of data units employed by DeepSeek's low-cost R1 model. Announcement comes amid increasingly bullish sell-side views on stock following a standout Q3, where group's planned capex ramp is seen driving revenue growth acceleration through FY28 amid surging demand for AI computing.

  • China to focus on property stabilization in housing policy at NPC:

    • China property a focus in government work report (GWR) though policy descriptions came as no surprise with emphasis on risk mitigation and stabilization. Notably China will introduce city-specifc policies on easing purchase restrictions (Xinhua). SecuritiesTimes citing industry experts noted new policy phrase indicates remaining curbs in top-tier cities likely to be further reduced. Lower-tier cities likely to increase housing subsidies, optimize provident fund usage, reduce mortgage rates and lower transaction fees. However fact that mentions of housing market fell under section of "risk mitigation", showing lower systemic risk, rather than reviving growth, still considered priority. Sellside firms noted policy to grant more autonomy for local governments to purchase inventory will not be game-changer given lack of incentives for both buyers (local SOEs) and sellers in the past while future execution will be closely watched. In addition, GWR calls for expansion of "whitelists" while analysts expected new financing will be mostly limited to SOEs and selected private ones, excluding most distressed developers.

  • Malaysia central bank keeps base rate unchanged despite risk to growth:

    • Bank Malaysia Negara (BNM) kept its overnight policy rate at 3.0% Thursday, as widely expected, with growth, employment and inflation prospects remaining within forecasts, and despite looming threat of tariffs. Said outlook for global growth, inflation and trade subject to 'considerable uncertainties' on tariffs from major economies and geopolitical developments. Added It expects growth to be maintained by domestic demand, export rebound to be moderate but sustained by global tech cycle. Said recent increase in minimum wages should aid demand without placing pressure on prices. Ringgit continues to be influenced by external developments with narrowing interest rate differential positive for currency. Financial markets may see increased bouts of volatility, it warned. It added threat to forecasts would be slowdown in major trading partners and lower-than-expected commodity production. Malaysia economy outperformed most in Southeast Asia in 2024, attracted record MYR378.5B ($85.4B) in investments that will likely create enough positive economic momentum to sustain growth, according to economists.

  • South Korean inflation eases back towards BOK target:

    • Statistics Korea said South Korea CPI rose 2.0% y/y in February, down from six-month high 2.2% in January and first decline in four months, but slightly higher than consensus forecasts. CPI rose 0.3% on m/m basis versus 0.7% last month, consensus on 0.2%. Bank of Korea said it expects consumer inflation to fluctuate around its medium-term 2.0% target level amid contrasting drivers of weaker won, low demand. Core inflation rose 1.8% y/y from 1.9% in January, or 0.1% on m/m basis. By sector, price rises were in narrow range from 0.3% y/y increase in alcohol & tobacco, to 6.3% in petroleum products, latter down from January's 7.3% reading (Yonhap). CPI readings will come as relief to BOK that last week cut base interest rate and hinted at more loosening to come just as consumer demand remains subdued, export growth weakens, specter of tariffs looms.

  • Seven & i confirms CEO change, announces Seven Eleven IPO plan, JPY2T share buyback:

    • Flurry of announcements from Seven & i (3382.JP) after the market close. Confirmed lead independent external director Stephen Hayes Dacus will replace Ryuichi Isaka as CEO effective 27-May. New developments came in an update on management initiatives. Announced plans for a Seven Eleven Inc IPO in one of the major US bourses by 2H26, Seven & i will retain a majority stake. Nikkei said IPO proportion would be some tens of percentages of total shares, amounting to at least JPY1T ($6.73B). Proceeds will contribute to a JPY2T share buyback framework by be implemented by FY30. Buyback to begin after the sale of Superstore Business Group, which will raise an additional JPY814.7B. Direction consistent with earlier reports indicating the special committee was set to reject Alimentation Couche-Tard's (ATD.CN) acquisition proposal and pursue a go-alone strategy after the founding family's MBO deal fell through due to insufficient financing. Despite stated constructive engagement with Couche-Tard on how to navigate expected anti-trust issues, press indicated a solution could not be found. Management change was said to be required to convince the special committee to reject Couche-Tard's bid.

  • Notable Gainers:

    • +15.1% 6707.JP (Sanken Electric): onsemi offers $35.10/share in cash for Allegro MicroSystems; Allegro MicroSystems board found the offer inadequate

    • +10.8% 7011.JP (Mitsubishi Heavy Industries): Trump reportedly pressing for clarification, hike in Japan's defense budget

    • +8.4% 9988.HK (Alibaba Group): introduces QwQ-32B model that achieves performance comparable to DeepSeek-R1

    • +6.9% 1519.HK (J&T Global Express): reports FY results with adjusted net income ahead of FactSet estimates

    • +6.1% 3382.JP (Seven & i): reportedly may launch ¥2T buyback; plan will be voted on today; Bain reportedly near deal to buy Seven & i's supermarket business, possibly for more than ¥700B ($4.7B)

    • +2.3% 220.HK (Uni-President China Holdings): reports FY results with revenue and operating income below FactSet estimates

    • +0.6% 2413.JP (M3): to acquire 51.0% stake in EWEL from Tokyu Land for ¥10.2B

  • Notable Decliners:

    • -26.1% 001570.KS (KUM YANG): to be removed from KOSPI 100, KOSPI 200, KRX 100, KRX 300 indices, effective 10-Mar

    • -5.7% 196170.KS (Alteogen): Merck reportedly asks USPTO to revisit patents that may mean it can't sell new version of Keytruda

    • -4.8% 9301.JP (Mitsubishi Logistics): to be removed from Nikkei 225; effective 1-Apr at open

    • -0.5% 7205.JP (Hino Motors): reportedly to restart merger talks with Mitsubishi Fuso

• Data:

  • Economic:

    • Australia January

      • Trade balance A$5.62B vs consensus $5.90B and revised A$4.92B in December

        • Exports +1.3% m/m vs +1.1% in December

        • Imports (0.3%) m/m vs +5.9% in December

      • Building approvals +6.3% m/m vs consensus 0.0% and revised +1.7% in December

    • South Korea

      • February CPI +2.0% y/y vs FactSet consensus +2.0% and +2.2% in prior month

        • CPI ex-food & energy +1.8% y/y vs +1.9% in prior month

  • Markets:

    • Nikkei: 286.69 or +0.77% to 37704.93

    • Hang Seng: 775.50 or +3.29% to 24369.71

    • Shanghai Composite: 39.13 or +1.17% to 3381.10

    • Shenzhen Composite: 37.11 or +1.81% to 2091.27

    • ASX200: (46.40) or (0.57%) to 8094.70

    • KOSPI: 18.03 or +0.70% to 2576.16

    • SENSEX: 381.10 or +0.52% to 74111.33

  • Currencies:

    • $-¥: (0.68) or (0.46%) to 148.2100

    • $-KRW: (0.37) or (0.03%) to 1444.3500

    • A$-$: (0.00) or (0.05%) to 0.6333

    • $-INR: +0.19 or +0.22% to 87.0481

    • $-CNY: (0.01) or (0.12%) to 7.2424