Back to Daily DR Market Summary

StreetAccount Summary - Asian Market Recap: Hang Seng +0.70%, Shanghai Composite +1.13% Taiex (0.05%) as of 04:10 ET

May 06 ,2025

• Synopsis:

  • Asian equities ended mixed Tuesday. Solid gains for mainland China stocks as they return from an extended holiday, Hong Kong also higher again. Australia, Taiwan and Singapore finished flat but elsewhere benchmarks turned lower as the day progressed. South Korea and Japan remained closed for a holiday. US and European futures indicate a lower opening. US dollar lower in late trade; Taiwan dollar giving up some recent gains, AUD weaker along with offshore yuan, yen moving lower. Treasuries largely unchanged. Crude oil contracts higher, precious metals notably strong, base metals mixed.

  • Asia equities tilted to the negative side Tuesday as mainland China boards traded again for the first time in several days, and other boards closed away from their peaks. Tariff newsflow also leaned negative with little substantive progress reported in negotiations, and after President Trump threatened fresh tariffs on pharmaceuticals and the non-American film industry. Asia forex stabilized over the day with most currencies reversing some of their recent gains against a slightly weaker US dollar. The Taiwan dollar weakened after authorities were forced to deny late on Monday that forex was forming part of trade negotiations, while the Hong Kong dollar is also slightly weaker after the HKMA was forced to sell HKD for a second consecutive day Monday to defend its trading band.

  • In macro developments, China holiday spending appeared to have improved y/y while there was evidence of improved inward travel too. However, on the negative side, the Caixin services PMI for April slipped to a seven-month low and missed estimates because of trade disruptions. Singapore PMI bucked the regional trend and improved but details revealed significant frontloading and a dismal outlook component. Vietnam manufacturing PMI contracted sharply in April while its trade surplus narrowed substantially. Thailand inflation turned negative in April, the first time prices have declined in more than a year, while Philippine inflation fell to its lowest in a year.

  • Sumitomo Mitsui Banking Corp (8316.JP) is in advanced talks to buy up to a 51% stake in Yes Bank (532648.IN), valuing the bank at $1.7B. CATL (300750.CH) has begun marketing for its $5B Hong Kong listing; is seeking $1B loan to fund an investment in Indonesia. Cummins India (500480.IN) said it won't provide an outlook for revenue or income for the remainder of the year because of growing economic uncertainty. The India government is considering selling minor stakes in several PSU banks in the next fiscal year including Central Bank of India (5532885.IN) and Bank of Maharashtra (532525.IN).

• Digest:

  • Taiwan dollar surge a 'tariff tremor' with more Asia forex volatility likely:

    • Asia currencies retreated Tuesday to reverse some recent gains as dollar steadied, and regional authorities moved to quash speculation forex part of tariff negotiations and to deny regional central banks were considering forming type of currency accord (Bloomberg). Appreciation in Asia currencies over past week also reflect optimism over trade deals but analysts say without meaningful appreciation in yuan or substantive progress on trade deals, rally could soon fade. Two-day surge in Taiwan dollar (TWD) of around 8% seen as latest exit from US assets / USD and 'signal of disquiet' in markets as tariffs shake confidence (FT, Reuters). TWD's move exacerbated by insurers, exporters, investors selling USD in hedging technique. Island's president, central bank, financial regulator had to reassure markets Monday forex not part of tariff discussions but widening spread between TWD spot rate, 1Y deliverable forwards suggest further appreciation potential (Bloomberg). Elsewhere, Hong Kong Monetary Authority spent HK$60.5B Monday, HK$56.1B Friday to defend HKD's forex peg after it approached upper end of trading band (Bloomberg).

  • Caixin Services PMI falls to seven-month low:

    • Caixin services PMI was 50.7 in April, missing consensus 51.7 and was sharply lower than 51.9 in March. Data marked 28 th consecutive month of services activity expansion however was softest since last September. Overall new work saw slowest growth in 28 months as disruptions to goods trade amid escalating tariffs had negatively impacted service providers. New export business increased only fractionally. Staffing levels dropped for second straight month amid concerns around costs. Average input costs continued to rise while servce providers lowered output charges for third month in a row amid intense competition. Business confidence slipped to second-lowest level on record, only higher than reading in February 2020 during first wave of Covid outbreak. Caixin Composite PMI fell to three-month low at 51.1, down from March's 51.8, reflecting softer increases in output across manufacturing and service sectors. Economists said impacts from US-China tariff standoff will gradually be felt in Q2 and Q3, urging more policy measures.

  • China May Day holiday spending increases 8% y/y:

    • Chinese tourists' spending rose 8% y/y during Labor Day holiday to CNY180B ($24.9B), however still below pre-pandemic levels on per capita basis (Reuters). Tourism industry said record 314M domestic trips took place during five-day holiday, higher by 6.4% y/y. Total spending per head rose 1.5% y/y to CNY574 according to Reuters calculations, still below CNY603 recorded in 2019. Total box office stood at CNY747M, only about half of last year. China Merchants Bank said property sales were slightly better than last year with more pronounced recovery in top-tier cities, while still wait-and-see among buyers in lower-tier cities. Consumption in China has been lackluster amid slowing economy, drawn-out property slump and growingly US-China trade standoff. A silver lining came in inbound spending as SCMP reported both Alipay and WeChat Pay showed strong inbound travel expenditure during holiday. Recall China expanded its visa-free list and updated tax refund policies in an effort to boost tourism.

  • US rejected Japan's demand for full exemption from reciprocal tariffs:

    • Press highlighting potential stumbling blocks in US-Japan trade negotiations following last week's talks. Kyodo sources noted Japan's request for full exemption from reciprocal tariffs was refused. US said it would only consider extending 90-day pause or reducing the 14% country-specific tariff when Japan had sought exemption from 10% baseline tariff as well. Nikkei sources also noted Japan objected to Trump administration's determination to keep steel, aluminum and auto tariffs in place. Access to Japan's auto and agricultural sectors another sticking point with US unhappy at number of US-made cars imported into Japan and demanding Tokyo allowing more US-grown crops. While reports have highlighted openness by Japan to boost imports of US agricultural products, some LDP lawmakers are baulking at proposal to increase rice imports given sensitivities around local farming interests (Nikkei). Following last week's talks, US said two sides to begin working-level consultations as they aim to reach agreement by early July.

  • India offers zero tariffs on certain industrial goods and pharmaceuticals to US on reciprocal basis:

    • Bloomberg citing sources with knowledge reported India has proposed zero tariffs on steel, auto components and pharmaceuticals on reciprocal basis up to certain quantity of imports in its trade talks with US. Those goods, beyond threshold, would see regular level of duties. Offer first tabled by Indian trade officials visiting Washington late April in an effort to expedite negotiations as two countries prioritize certain sectors to reach early deal before 90-day pause on Trump's reciprocal tariffs. Washington also asked New Delhi to resolve concerns around Quality Control Orders, seen as non-tariff trade barriers and were criticized for being non-transparent and unfair. Meanwhile India is said willing to reconsider existing QCOs in medical devices and chemicals. Developments came as Trump said earlier that some trade deals could be signed as soon as this week with Asian countries, including South Korea, Japan and India, among favorites to reach early agreements with Washington.

  • Notable Gainers:

    • +7.4% 2282.HK (MGM China Holdings): reports Q1 earnings with adjusted EBITDA HK$2.37B vs FactSet HK$2.13B

    • +2.5% 2317.TT (Hon Hai Precision Industry): reports April revenue NT$641.37B, +25.5% y/y

    • +1.8% 2395.TT (Advantech): reportedly expects recent appreciation of NT$ to have small impact on profit

    • +1.7% 532648.IN (YES BANK): RBI reportedly allows SMBC to acquire 51% stake in Yes Bank

    • +1.5% 9988.HK (Alibaba Group): Ant Group reportedly planning to list Ant International on Hong Kong stock exchange

    • +0.1% 300750.CH (Contemporary Amperex Technology Co.): reportedly begins gauging investor interest for Hong Kong listing

  • Notable Decliners:

    • -4.5% 500480.IN (Cummins India): parent chooses not to provide outlook for revenue or profitability for the remainder of the year citing growing economic uncertainty

    • -3.6% 3443.TT (Global Unichip): reports April revenue NT$1.67B, (1.3%) y/y

• Data:

  • Economic:

    • China

      • April Caixin services PMI 50.7 vs consensus 51.7 and 51.9 in prior month

        • Caixin Composite PMI 51.1 vs 51.8 in prior month

    • Australia March

      • Household spending (0.3%) m/m vs consensus +0.2% and +0.2% in February

        • Household spending +3.5% y/y vs consensus +3.9% and +3.3% in February

      • Building approvals (8.8%) m/m vs consensus (1.5%) and revised (0.2%) in February

  • Markets:

    • Nikkei: Closed

    • Hang Seng: 158.03 or +0.70% to 22662.71

    • Shanghai Composite: 37.08 or +1.13% to 3316.11

    • Shenzhen Composite: 43.11 or +2.25% to 1958.73

    • ASX200: (6.40) or (0.08%) to 8151.40

    • KOSPI: Closed

    • SENSEX: (204.45) or (0.25%) to 80592.39

  • Currencies:

    • $-¥: (0.47) or (0.32%) to 143.2330

    • $-KRW: +4.26 or +0.31% to 1379.6200

    • A$-$: (0.00) or (0.16%) to 0.6458

    • $-INR: +0.15 or +0.18% to 84.3768

    • $-CNY: (0.06) or (0.78%) to 7.2147