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StreetAccount Summary - Asian Market Recap: Nikkei (4.05%), Hang Seng (1.31%), Shanghai Composite (0.46%) as of 04:10 ET

Mar 31 ,2025

• Synopsis:

  • Asia equities sharply lower Monday. Japan and Taiwan fared worst with Nikkei and Taiex at six-month and seven-month low respectively. South Korea and Australia tumbled. Hang Seng lower too, erasing gains since 4-Mar. Mainland China saw milder declines. Thailand down on economic concerns post Friday earthquake. Malaysia, Singapore, Indonesia and India closed for a holiday. US futures down, Europe trading lower. Yen notably stronger against dollar driven by demand for haven assets. Aussie and kiwi both under pressure. Treasury yields slid across tenors. Oil edging up in Asian afternoon. Gold hit new record high. Bitcoin trading lower.

  • Asian markets sold off amid growing concerns about uncertainties from President Trump's tariff announcements on Wednesday. Trump said reciprocal tariffs would apply to all countries, seemingly contradicting press reports suggesting some would receive exemptions and dashing hopes that levies would be more limited. Latest press reports note Trump team is weighing broader and higher tariffs and idea of universal tariffs is back as an option. Growing rhetoric on rising US recession odds with Goldman Sachs seeing 35% probability of such scenario by year-end and predicting three Fed rate cuts in the year.

  • China official manufacturing PMI firmed in March with output and new orders strengthening while export declines narrowed. Non-manufacturing PMI also rose with construction and services logging moderate improvements. Japan industrial production rose at quickest pace in 11 months but auto segment stagnant ahead of Trump's tariffs, while retail sales missed expectations. South Korea industrial production growth led by electronics; it also ended short-selling ban after tightening measures to crackdown on illegal transactions. New Zealand business confidence eased slightly, accompanied by pickup in inflation/cost expectations.

  • In other developments, China's finance ministry will inject CNY500B ($69B) into four of country's largest state banks to replenish core tier-1 capital, including Bank of Communications (3328.HK), Bank of China (3988.HK), Post Savings Bank of China (1658.HK) and China Construction Bank (939.HK). CK Hutchison considering delaying signing of deal to sell 43 ports, including Panama Canal ones, to BlackRock (BLK)-led consortium. Italian-Thai Development (ITD.TB) fell as much as 27% after government office tower it was building with a Chinese partner collapsed on Friday's earthquake. Nikkei sources noted SoftBank (9984.JP) eying $1T of US investment in AI robot industrial parks.

• Digest:

  • China official PMIs slightly better than expected:

    • Official manufacturing PMI was 50.5 in March, compared with consensus 50.4. Follows 50.2 in the previous month to mark the highest in a year. Production and new orders strengthened marginally further into expansion territory, while export declines eased. Inflation metrics softened with input prices edging back lower after a brief increase in February, while output prices declined at a faster pace. Employment and finished goods inventories maintained a steady downtrend. Headline improvement driven unusually by small firms (though remains in slight contraction) edging out a deceleration among large firms. Nonmanufacturing PMI was 50.8 vs consensus 50.6 and prior month's 50.4. Construction and services sectors both logged moderate improvements in expansion territory. Yet new orders and input/output prices remain in clear contraction while employment declines accelerated. Composite PMI edged up to 51.4 from 51.1. NBS attributed results to normalizing business activities after the LNY holidays. Softer inflation metrics largely put down to commodity prices. Construction sector buoyed by warmer weather and accelerated development projects.

  • China to inject $69B in four big banks via share placements:

    • Bloomberg cited corporate filings indicating the Finance Ministry will inject CNY500B ($69B) into four of the largest state banks -- Bank of Communications (3328.HK), Bank of China (3988.HK), Postal Savings Bank of China (1658.HK), China Construction Bank (939.HK) -- via share placements on mainland bourses to shore up tier-1 capital. Banks to issue new shares at a premium between 8.8% and 21.5% above Friday's closing levels. Announcements match an earlier pledge to issue CNY500B in special sovereign bonds to replenish banking capital. While top six lenders have capital levels above requirements, capital infusion aims to provide a buffer against record-low 1.52% NIM, slowing profit growth and rising bad debt, increasing lending capacity to facilitate government growth policy. Nikkei cited banks' Friday briefings, expressing expectations that NIMs will continue to come under pressure this year as PBOC plans more rate cuts. According to annual financial statements, four banks' combined NPLs totaled CNY1.3T, up CNY82B from the previous year. Aggregate NPL ratio among the four banks declined, ranging between 1.25% and 1.34%, though Postal Savings Bank increased 0.07 ppt to 0.9%.

  • Ahead of reciprocal tariff announcement, Trump privately pushing more aggressive approach:

    • On 2-Apr President Trump will make announcement on reciprocal tariffs though still a lot of uncertainty surrounding details and implementation. On Sunday Trump said reciprocal tariffs would apply to all countries, seemingly contradicting press reports suggesting some would receive exemptions (Bloomberg). Washington Post sources noted Trump is internally pushing for more aggressive tariffs, and recently revived idea of universal tariffs. Other press articles also highlighted Trump's renewed interest in universal tariff with his advisers considering global rate of 20% as a way to help increase government revenue and offset cost of tax cuts (link). Trump advisers still weighing options, with most likely one involving tariffs on 15% of countries considered America's worst trading partners. Politico discussed concerns among Trump administration officials and allies about extent to which Trump is creating confusion about what he intends, often siding with trade hawks and undercutting those pushing for more targeted approach, making final tariff proposal a moving target. Trump himself also appears dismissive of concerns about economic impact, telling NBC News he 'couldn't care less' if car prices rise (though in reference to foreign autos) while denying reports he told auto CEOs not to raise prices and repeating tariffs will be permanent.

  • CK Hutchison shares under pressure after delay in signing of ports deal:

    • CK Hutchison (1.HK) shares dropped as much as 4.7% Monday, most in nearly two weeks, following slews of criticism from Beijing and pro-Beijing Hong Kong newspapers while sources said owner Li Ka-shing is considering delaying signing of deal to sell Panama ports to Blackrock-led consortium on 2-April (Bloomberg, Reuters). However Reuters souces said it does not mean deal has been called off and talks still underway. Beijing ramped up pressure on the transaction, which is part of $19B transaction by CK Hutchison to sell 43 ports around world and touted as gain for Trump administration for "taking back control" of Panama canal. CCTV-affiliated social media account Yuyuantantian said Saturday sale "tantamount to passing a knife to opponent" as the ports are not ordinary assets but rather key infrastructure which involves key national interest. China's market regulator said it would conduct antitrust review on the deal after Bloomberg reported Beijing has told state-owned companies to pause any new collaboration with businesses linked to Li Ka-shing and his family.

  • Japan data mixed, industrial production beats, retail sales miss:

    • Industrial production rose 2.5% m/m in February, above consensus 2.0%. Follows 1.1% decline in the previous month and marks the first increase in four months. Main drivers were production equipment, electronic parts & devices and chemicals. Transportation equipment (excluding autos) and steel among the notable drags. Shipments logged faster growth, leading a sharp drop in inventories. Core capital goods shipments fell, though still tracking somewhat above Q4. Going forward, METI survey projections point to mild growth of 0.6% in March and 0.1% in April, implying flat Q1 growth, followed by a positive start to Q2. Adjusted March forecast unusually unchanged. Retail sales rose 1.4% y/y in February, below consensus 2.0%, following revised 4.4% in the prior month. Translated to 0.5% m/m growth, extending a 1.2% increase in January. Mainly reflects solid rebound in machinery & equipment and apparel. Q1 remains on track to turn positive for the first time in a year. Macro signal value has diminished lately given the notable boost from inbound tourism, alongside the nominal basis of the data set. Latest JCER Q1 GDP consensus forecast was downgraded notably to 0.16% q/q annualized (vs prior 1.11%) following surprisingly strong 2.2% in Q4.

  • Notable Gainers:

    • +5.8% 001289.CH (China Longyuan Power Group): reports FY earnings with net income attributable and revenue ahead of FactSet estimates

    • +4.9% 489.HK (Dongfeng Motor Group): China reportedly to push for reorganization of state-owned automakers

    • +4% 7732.JP (Topcon): launches management buyout with KKR, JIC at ¥3,300/share

    • +2.1% 000333.CH (Midea Group): reports FY results with operating profit ahead of StreetAccount estimates; proposes CNY5-10B on-market share buyback

  • Notable Decliners:

    • -17.7% 1193.HK (China Resources Gas Group): reports FY results with net income attributable HK$4.09B vs FactSet HK$5.43B

    • -10.8% 042700.KS (HANMI Semiconductor): reports preliminary Q1 operating profit KRW68.6B vs FactSet KRW78.24B

    • -8.1% 8725.JP (MS&AD Insurance): Mitsui Sumitomo Insurance to take 15% stake in W.R. Berkley

    • -3.9% 7550.JP (Zensho Holdings): to shut 2K stores for four days due to recent incidents of contamination

    • -3.1% 1.HK (CK Hutchison Holdings): reportedly will will not sign deal to sell Panama ports next week; responds to media report regarding spin-off of global telecommunication assets and businesses; board has not made any decision to proceed with any transaction

    • -1.7% 2588.HK (BOC Aviation): to purchase 70 Airbus A320NEO family aircraft

    • -1.3% 000063.CH (ZTE): chairman Li Zixue reportedly steps down due to age

• Data:

  • Economic:

    • China

      • March official manufacturing PMI 50.5 vs consensus 50.4 and 50.2 in prior month

        • Non-manufacturing PMI 50.8 vs consensus 50.6 and 50.4 in prior month

        • Composite PMI 51.4 vs 51.1 in prior month

    • Japan

      • February Industrial production +2.5% m/m vs consensus +2.0% and (1.1%) in prior month

        • METI survey projections +0.6% in March, +0.1% in April

      • Retail sales +1.4% y/y vs consensus +2.0% and revised +4.4% in prior month

    • South Korea

      • February industrial production +1.0% m/m vs FactSet consensus (0.8%) and revised (2.8%) in prior month

        • Industrial production +7.0% y/y vs FactSet consensus +2.8% and revised (4.7%) in prior month

    • Australia

      • February private sector credit +0.5% m/m vs consensus +0.5% and +0.5% in January

    • New Zealand

      • March ANZ Business Confidence +57.5 vs +58.4 in February

  • Markets:

    • Nikkei: (1,502.77) or (4.05%) to 35617.56

    • Hang Seng: (307.02) or (1.31%) to 23119.58

    • Shanghai Composite: (15.56) or (0.46%) to 3335.75

    • Shenzhen Composite: (21.07) or (1.04%) to 2005.11

    • ASX200: (138.60) or (1.74%) to 7843.40

    • KOSPI: (76.86) or (3.00%) to 2481.12

    • SENSEX: 0.00 or 0.00% to 77414.92

  • Currencies:

    • $-¥: (0.66) or (0.44%) to 149.1850

    • $-KRW: +1.47 or +0.10% to 1471.8700

    • A$-$: (0.00) or (0.39%) to 0.6263

    • $-INR: (0.03) or (0.04%) to 85.5064

    • $-CNY: (0.01) or (0.17%) to 7.2509