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StreetAccount Summary - Asian Market Recap: Nikkei +0.65%, Hang Seng +0.60%, Shanghai Composite (0.04%) as of 04:10 ET

Mar 26 ,2025

• Synopsis:

  • Asia equities finished higher almost everywhere Wednesday. South Korea's Kospi outperformed to reach one-month highs as battery and semi stocks rose notably. Elsewhere, markets relatively quiet as many benchmarks gapped higher and plateaued for the rest of the day. Small gains for the Hang Seng, Australia and several Southeast Asia bourses, while Taiwan, India and mainland China boards dipped into the close. Indonesia outperformed as it bounced back from recent falls. US futures flat, Europe opened higher. Dollar advancing, yen and yuan weaker, rupiah finding a floor. Treasury yields higher, JGB 10Y yield at more than 16-year high. Crude bouncing back from overnight losses, precious metals lower; copper surged to record high on tariff talk but iron ore futures lower.

  • Asia equities cautiously higher in Wednesday trade as investors welcomed the latest tariff chatter that indicated a more targeted approach may materialize. Nevertheless, gains capped after fresh Trump comments on potential copper import tariffs taking effect within weeks caused copper futures to surge to record highs. Indonesia's three big state-owned banks announced higher-than-expected dividends, boosting the JSX but analysts warned underlying drivers for recent losses still in place.

  • Australia Federal Budget late Tuesday unveiled a surprise income tax cut from a modest lift in the lowest tax bracket. A projected deficit of A$42.1B ($26.5B) was slightly higher than expected; Australia monthly CPI unexpectedly edged lower with a similar ease in trimmed mean. BOJ's governor Ueda said the bank will take stronger steps if inflation moves beyond expectations, added no decision made over ETF holdings. Singapore's manufacturing output contracted against expectations of growth as its volatile pharma sector declined sharply.

  • Couche-Tard said it was seeing strong interest in Seven & i's (3382.JP) US 7-Eleven stores it could sell as part of its acquisition proposal. CATL (300750.CH) confirmed it had received approval from the China Securities Regulatory Commission for its planned Hong Kong share sale. CK Hutchison (1.HK) is proceeding with the sale of its two Panama ports to BlackRock despite Beijing's anger over the deal. Sunac China (1918.HK) unveiled an unprecedented second round of restructuring to target offshore debt risks, may include $30M loan. LG Electronics' (066570.KS) India unit IPO may attract a lower valuation following the dip in the country's stock market. Paladin Energy (PDN.AU) withdrew its FY25 production guidance after severe weather hit its Namibia mine.

• Digest:

  • BOJ's Ueda says trend inflation approaching 2%, still no end-point for ETF holdings:

    • Nikkei cited BOJ Governor Ueda's testimony at the lower house financial affairs committee for the semi-annual report on currency and monetary control. Notable remarks came in the Q&A, where Ueda said trend inflation is approaching 2% while qualifying it has yet to reach the range consistent with the inflation target and thinks there is "a bit further to go." Further clarifies remarks from his post-MPM press conference noting it was below 2% but above 1%. Committee members continued to probe the BOJ's stance on asset purchases. Ueda stated they would evaluate options on how to manage ETF holdings including whether to unwind. Asked if BOJ intends to hold ETFs indefinitely, Ueda replied that he hasn't ruled out that option at the current stage. Still, noted that any conclusion requires more time. Referring to the prior precedent of BOJ share purchases from banks, Ueda noted tapering ETFs at a similar pace would take more than a century to complete. Prepared statement contained no new clues, repeating core guidance that policy would continue to be adjusted if the economy and prices continued to evolve in line with the outlook.

  • Australia monthly CPI inflation unexpectedly edges lower:

    • Headline CPI rose 2.4% y/y in February, compared to consensus and prior month's 2.5%. Trimmed mean also eased to 2.7% from 2.8%. Most major categories saw some moderation, though ABS said the main driver was housing, mostly reflecting lower electricity prices due to energy rebates in Victoria with some still left in the pipeline. Rents rose 5.5% to mark the lowest since Mar-23, consistent with rising vacancy rates across most capital cities. New dwelling prices slowed to 1.6% from 2.0%, softest since May-21 reflecting home builder discounting and promotional offers. Impacts limited, though further supports the case for RBA rate cuts this year (Bloomberg). However, markets digesting implications of the surprise tax cuts out of the Federal Budget following preceding concerns that pre-election spending may narrow the scope for RBA easing. Finance Minister Gallagher in a Bloomberg Television interview downplayed inflation implications given tax breaks are spread over two years and touted Treasury forecasts projecting inflation returning sustainably to the inflation target band six months earlier than before. Markets expect no policy change at next week's RBA meeting and pricing in a two-thirds probability of a cut in May.

  • Australia Federal Budget reveals surprise tax cuts ahead of election:

    • Australia 2025-26 Federal Budget showed a deficit of A$42.1B ($26.5B), slightly above consensus A$40B, while lower than prior government forecast A$46.9B as of the mid-year update. Follows expected A$27.6B deficit this fiscal year, swinging from a A$15.8B surplus a year earlier. 2025-26 deficit equates to 1.5% of GDP. Forward projections through 2028-29 sees deficit ratio tracking between 1.1% and 1.3%. Main surprise came in income tax breaks totaling A$17.1B over five years via a slight increase in the lowest tax bracket in a moderate augmentation of prior relief measures and contain bracket creep. Underlying economic assumptions include GDP growth of 2.25% following expected 1.5% this year (revised down from 1.75%) and expected to edge higher to 2.5% in 2026-27. CPI inflation anticipated to remain in the RBA's 2-3% target band, though seen rising to 3% next year. Potential tariff impacts seen "modest" in the long run according to Treasurer Chalmers (The Australian) and largely a function of changes to growth among major trading partners. Treasury modelling indicated a first-round 25% US tariff would hit Australian GDP by just 0.1 ppt per year. A retaliatory 25% levy impact would be 0.2 ppt at worst. Indirect effects estimated to be nearly four times as large as direct effects. Domestic inflation implications estimated to be negligible.

  • India considers tariff cuts on US imports to offset reciprocal tariffs:

    • Reuters reported India considering slashing tariffs on more than half of US imports to mitigate impact of reciprocal tariffs set to start 2-Apr. Internal India government documents said reciprocal tariffs would hit 87% of total exports worth $66B, could be partially offset by tariff cuts worth $23B. Decision not final with other options such as sectoral adjustments and product-by-product cuts over wide ad valorem cut being considered. Article said New Delhi mulling tariff reduction on 55% of US imports, currently subject to 5-30% tax; some product tariffs could be axed altogether, others cut 'substantially'. Cuts to be part of first phase of trade deal US, India currently negotiating with Washington keen to narrow $45.6B trade deficit. However, India economic think-tank GTRI warned any US-India trade deal subject to renegotiation, change by US Congress that could demand domestic legal changes, regulatory reforms that could undermine India sovereignty (BusinessStandard).

  • Indonesia equities rally on bank dividends, rupiah steadies:

    • Indonesia's JSX index gained more than 3.5% and rupiah rallied in morning trade Wednesday, after three large-cap, state-owned banks declared larger-than-expected dividend payments. But analysts warned underlying source of recent equity and rupiah selloff still abound, with eyes turning to Bank Indonesia (BI) and timing of next interest rate cut (Bloomberg). Rupiah Tuesday hit lowest level since 1997-98 Asia financial crisis on deepening foreign investor concerns over President Prabowo's policy changes that have damaged country's public finances, consumer sentiment; inclusion of senior military personnel in civilian institutions, US tariff policies also worrying FIIs (Bloomberg, JakartaGlobe). JSX almost 20% lower since Prabowo took charge while rupiah second worst performing Asia currency YTD despite frequent BI intervention including on Tuesday (Reuters). Currency likely to remain near lows as Eid holiday approaches with medium-term outlook gloomy if BI keeps rates high, analysts said.

  • Notable Gainers:

    • +12.7% 2313.HK (Shenzhou International Group Holdings): reports FY results with net income attributable and revenue ahead of FactSet estimates

    • +6.1% 6862.HK (Haidilao International Holding): reports FY results with adjusted net income ahead of FactSet estimates

    • +5.2% 7974.JP (Nintendo): reportedly plans 3 phase launch for Switch 2; resumed buy at Goldman Sachs

    • +3.9% 288.HK (WH Group): reports FY results with net income attributable and revenue after biological FV ahead of StreetAccount estimates

    • +3.5% 6503.JP (Mitsubishi Electric): reportedly targets ROE 10% in two years

    • +2.8% 000210.KS (DL Holdings): acquires 5.3% stake in Yeocheon NCC for KRW100B in cash

    • +2.8% DCRU.SP (Digital Core REIT): subsidiary acquires 20.0% interest in Digital Osaka 3 TMK for ¥13.00B (SG$115.8M)

    • +2.4% 1211.HK (BYD Co.): reportedly expects 2025 vehicle sales to reach 5.5M units

  • Notable Decliners:

    • -8.3% 9633.HK (Nongfu Spring): reports FY results with net income attributable below StreetAccount estimates

    • -5.5% 3968.HK (China Merchants Bank): confirms preliminary FY results; downgraded to underperform from neutral at BofA

    • -1.7% 1024.HK (Kuaishou Technology): reports Q4 results with revenue below FactSet estimates

• Data:

  • Economic:

    • Japan February

      • Services PPI +3.0% y/y vs consensus +3.1% and revised +3.2% in prior month

    • Australia February

      • CPI +2.4% y/y vs consensus +2.5% and +2.5% in January

        • Trimmed mean CPI +2.7% y/y vs +2.8% in January

    • Singapore February

      • Manufacturing production y/y (1.3%) versus +8% in prior month

  • Markets:

    • Nikkei: 246.75 or +0.65% to 38027.29

    • Hang Seng: 139.07 or +0.60% to 23483.32

    • Shanghai Composite: (1.28) or (0.04%) to 3368.70

    • Shenzhen Composite: 7.95 or +0.39% to 2046.12

    • ASX200: 56.50 or +0.71% to 7999.00

    • KOSPI: 28.13 or +1.08% to 2643.94

    • SENSEX: (498.80) or (0.64%) to 77518.38

  • Currencies:

    • $-¥: +0.37 or +0.25% to 150.2840

    • $-KRW: (1.06) or (0.07%) to 1462.3100

    • A$-$: +0.00 or +0.24% to 0.6319

    • $-INR: +0.20 or +0.23% to 85.7684

    • $-CNY: +0.00 or +0.07% to 7.2623