Back to Daily DR Market Summary

StreetAccount Summary - Asian Market Recap: Nikkei (0.61%), Hang Seng +0.62%, Shanghai Composite +0.21% as of 04:10 ET

May 21 ,2025

• Synopsis:

  • Asian equities ended mostly higher Wednesday. Taiwan's chip stocks led the gainers to send the Taiex to six-week highs. Australia and India also showing solid gains, South Korea led by pharma stocks. Hang Seng led Greater China higher although was off its peak by the close. Southeast Asia mixed, Japan's main boards closed down. US futures lower, Europe opened down. US dollar DXY index lower and below 100 for the first time in two weeks; AUD, yen and yuan all stronger. Treasury yields higher across tenors, JGBs mixed with superlong-dated yields rising to fresh record highs. Crude blends sharply higher on reports Israel was readying an attack on Iran, precious metals rallied on dollar's weakness. Base metals also higher. Cryptocurrencies higher with Bitcoin at a fresh record high.

  • Asia equities eased higher over the day thanks in part to a tick up into Wall Street's close overnight and partly from a series of domestic catalysts. South Korea's pharma stocks surged on promises of state support to cushion tariffs to help to help Kospi gain, despite losses in technology; India led by bank stocks as investors ratcheted up hopes of an RBI rate cut in June; Australia buoyed by continued optimism post RBA; insurance stocks weighed on Japan's Topix as JGB yields continue to move higher.

  • In regional developments, Reuters Tankan survey showed Japan's manufacturer sentiment little changed in May. Japan and South Korea trade data showed export growth slowed in April with shipments to US and China contracting notably. Taiwan export order growth surprised on the upside due to front-loading. In the latest trade news, preliminary figures show US-China trade truce has led to a revival in freighter bookings and shipping rates. Meanwhile, G7 finance ministers were discussing de minimis tariffs on Chinese goods to combat oversupply of cheap imports. Bank Indonesia lowered its base interest rate to 5.75% and trimmed FY GDP growth forecasts.

  • CATL (3750.HK) stock in Hong Kong rose again Wednesday however there were warnings over its very small free float available on HKEX. Cobalt producer CMOC (603993.CH) admitted it is running out of stockpiles and called on the Congo to lift a ban on exports. Meitu (1357.HK) has issued $250M three-year convertible bonds to Alibaba equivalent to around 6.9% of all issued shares. Westpac (WBC.AU) is to simplify its operations and shed 1,500 jobs as it moves to cut costs and streamline technology systems.

• Digest:

  • Japan export growth softens after 'Liberation Day' announcement:

    • Customs exports rose 2.0% y/y in April, slightly below consensus 2.5%. Follows revised 4.0% in the previous month, marking the softest since a brief decline in Sep-24. Main growth drivers were semiconductors and other electronics components, food and pharmaceuticals. Key drags came from autos, steel and maritime vessels. By region, exports to US fell for the first time in four months, EU declines deepened while Asia growth remained largely steady as China stabilized from a drop in March. Imports fell 2.2%, narrower than expectations of 4.2%, following a 1.8% increase in the prior month. Main drags were coal, crude oil and aircraft. Weakness was driven primarily by a sharp drop in US imports as EU edged lower and Asia was mildly positive. Attention on trade has concentrated on US after the reciprocal tariffs were announced on 2-Apr following separate levies on autos. Recent Nikkei article discussed the magnitude of concessions Japan would need to bring the FY24 US bilateral surplus of JPY9T ($62B) into balance, outlining unrealistic numbers such as a 72-fold increase in US auto imports, nearly 190-fold increase in US rice equivalent to eight years of annual consumption, or 18-fold boost in corn amounting to 15 years of consumption. BOJ real trade indices showed exports fell 1.3% m/m while imports rose 1.5%, implying a negative start to Q2 GDP net external demand.

  • As US-China trade rebounds, other countries eye tariffs on cheap Chinese products:

    • US-China trade truce leading to revival in trade with Vizion figures showing China-to-US freighter bookings more than doubled in week beginning 12-May (Bloomberg). Corresponded with ~16% increase in Shanghai-LA spot shipping rates for week ending 15-May, largest such increase for 2025. Rebound in trade has prompted debate whether it heralds another round of front-loading as companies take advantage of 90-day pause. Trade tensions still simmering in other areas after US Commerce Department issued preliminary determination accusing Beijing of unfairly subsidizing key battery components, paving way for potential imposition of anti-subsidy duties on imports from China (Bloomberg). Tensions not just confined between US and China with G7 finance ministers also discussing putting tariffs on 'de minimis' Chinese goods in bid to combat oversupply of cheap imports (Bloomberg). With US ending 'de minimis' tariff exemption, other countries now concerned China exporters will flood low-cost goods to other markets and undercut domestic producers.

  • Bond market volatility renews concerns about demand for duration:

    • Recent developments in bond markets renewing questions about demand for duration with long-dated Treasury yields seeing notable moves higher this week (30Y yield touched highest since late 2023). Moody's US credit rating downgrade heightened attention on deficit implications from reconciliation legislation, reinforcing concerns about investor appetite for longer-term securities when US exceptionalism theme has already been punctured this year by tariffs. Strategists eyeing higher yields with markets positioning similar outcome as downside hedging costs approach one month high (Bloomberg). Supply concerns not just confined to US after Tuesday's poor 20Y JGB auction led to spike in superlong yields. Both 30Y and 40Ys hit record highs while 10Y near highest since May 2008, prompting some strategists to warn of buyers strike at the long end (Bloomberg). Net supply has risen to highest since at least 2010 according to Bloomberg analysis of central bank data. Selloff carried extra relevance as BOJ bond market hearings began Tuesday with economists viewing it as signal for central bank to proceed carefully in its taper operations.

  • South Korea shipments for early May falls as government pledges support for exporters:

    • South Korea's trade data for first 20 days of May showed exports contracted again with notable falls in shipments to US and China. Total exports fell 2.4% y/y and imports declined 2.5% to produce trade deficit of $300M (Yonhap). Exports to US contracted 14.6% y/y, to China by 7.2% but those to Taiwan rose 28.2%. By sector, auto shipments fell 6.3%, steel products by 12.1%; declines offset by continued strength in semiconductor exports that increased 17.3%. Separately Wednesday, government pledged more support for key export sectors including autos and biopharma, both of which are thought unlikely to escape high US tariffs (Yonhap). Additional KRW28.6T ($20.5B) available for emergency liquidity, consulting services, restructuring help, financial assistance in form of low-interest loans; to be paid for by recently passed extra budget. KRW 7.4T allocated to aid exporters seek new overseas markets. Reuters noted pharma exports totaled just $9.6B last year but 16% of those shipments was to US.

  • Bank Indonesia cuts rates as window for easing opens:

    • Bank Indonesia (BI) resumed easing cycle with 25 bp cut to its 7D reverse repo rate to 5.5%, as expected by small majority of economists, follows three consecutive hold decisions. Bank also cut overnight deposit rate to 4.75%, lending facility to 6.25% (Reuters). Trimmed FY GDP growth forecast to 4.6-5.4%, inflation forecast at 1.5-3.5%. Governor Warijiyo said economy needs lower interest rates to support growth, said Q2 indicators showed several sectors needed support. Economists said 90-day pause in US tariffs, ongoing trade negotiations and lowering of US-China trade tension, sparked rupiah rally, gave BI respite on defending currency and provided window to ease policy. Economic slowdown amid weak consumer sentiment and poor state revenues that has led to cutback in government spending programs, also weighed (Bloomberg). BI likely to continue to monitor rupiah volatility before next move as currency remains highly sensitive to trade and currency.

  • Notable Gainers:

    • +18.6% 1357.HK (Meitu Inc): issues $250M three-year convertible bonds to Alibaba at initial conversion price of HK$6/share

    • +9.6% 9698.HK (GDS Holdings): reports Q1 earnings with adjusted EBITDA CNY1.32B vs StreetAccount CNY1.26B

    • +6.2% 6808.HK (Sun Art Retail Group): reports FY earnings with revenue CNY71.55B vs FactSet CNY71.41B

  • Notable Decliners:

    • -7.1% 8630.JP (Sompo): reports FY earnings; guides sale of strategic shares of more than ¥200.0B for this FY

    • -5.7% 2057.HK (ZTO Express): reports Q1 earnings with adjusted EPADS CNY2.71 vs FactSet CNY2.90

    • -4.2% 1179.HK (H World Group): reports Q1 earnings

    • -2.6% 8766.JP (Tokio Marine Holdings): reports FY results; expects sale of ¥600B of strategic shares

• Data:

  • Economic:

    • Japan

      • April trade balance (¥115.8B) vs consensus ¥215.3B and revised ¥559.4B in prior month

        • Exports +2.0% y/y vs consensus +2.5% and revised +4.0% in prior month

        • Imports (2.2%) y/y vs consensus (4.2%) and revised +1.8% in prior month

      • May Reuters Tankan manufacturers sentiment index +8 vs +9 in prior month

    • New Zealand April

      • Trade balance NZ$1,426M vs NZ$970M in March

        • Exports +25% y/y vs +19% in March

        • Imports +1.8% y/y vs +12% in March

  • Markets:

    • Nikkei: (230.51) or (0.61%) to 37298.98

    • Hang Seng: 146.30 or +0.62% to 23827.78

    • Shanghai Composite: 7.10 or +0.21% to 3387.57

    • Shenzhen Composite: 0.09 or +0.00% to 2010.01

    • ASX200: 43.50 or +0.52% to 8386.80

    • KOSPI: 23.78 or +0.91% to 2625.58

    • SENSEX: 418.47 or +0.52% to 81604.91

  • Currencies:

    • $-¥: (0.56) or (0.39%) to 143.9480

    • $-KRW: (6.75) or (0.48%) to 1386.9700

    • A$-$: +0.00 or +0.34% to 0.6446

    • $-INR: +0.10 or +0.12% to 85.6571

    • $-CNY: (0.01) or (0.19%) to 7.2063