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StreetAccount Summary - Asian Market Recap: Nikkei +0.84%, Hang Seng (0.87%), Shanghai Composite +0.59% as of 04:10 ET

Jun 30 ,2025

• Synopsis:

  • Asian equities ended mixed Monday. Among the benchmarks that gained were the Nikkei and Topix, Shanghai and Shenzhen's main boards, Australia and South Korea. Southeast Asia stocks were also largely higher. Among those losing ground were the Hang Seng, Taiwan's Taiex and India's Nifty and Sensex. US futures point to a strong open again, Europe pared opening gains. US dollar weakening again, advances in Asia currencies. Treasuries mixed. Crude oil futures trading around the flatline, precious metals higher. Iron ore higher again in China.

  • Few significant news points over the weekend to dent equities' recent trajectory higher with Monday's moves supported by reports Canada was to scrap its digital services tax to restart trade talks. Japan's negotiator also said he was still working with the US towards a deal while Taiwan reported 'constructive progress' with ten days to go before the White House's deadline. South Korea said it was seeking an extension to its 90-day tariff reprieve to allow more time for talks.

  • In economic developments, China official PMI showed manufacturing had contracted for a third consecutive month but was above FactSet consensus; non-manufacturing PMI was also better than expected. Japan industrial production rebounded by less than forecast, continuing its recent softness. South Korea industrial output contracted for second month while retail sales were flat.

  • The Japan government has approved an "emergency response" for Tokyo Electric Power's (9501.JP) Kariwa nuclear power plant. Zijin Mining (2899.HK) is to acquire the Raygorodok Gold mine project in Kazakhstan for around $1.2B, its largest acquisition in six years. Emperor International (163.HK) reported it had missed payments to bank loans worth HK$16.6B ($2.1B) and was talking to them over a restructuring plan. Torrent Pharmaceuticals (500420.IN) will buy a 46.4% controlling stake in JB Chem and Pharma (506943.IN) from KKR for around INR256.89B ($3.01B). Adani Ports & SEZ (532921.IN) is in negotiations with investors to raise around INR30B ($451M) through local-currency long-dated bonds in the coming months, according to press reports.

• Digest:

  • China manufacturing PMI remains in mild contraction with some encouraging signs:

    • Official manufacturing PMI was 49.7 in June, close to consensus 49.6. Follows 49.5 in the previous month and marks the narrowest of three straight months in contraction. Core components incrementally encouraging with production logging firmer growth as new orders returned to expansion for the first time in three months and export declines eased marginally. Weakness in input/output prices moderated though was attributed to international commodity prices with final demand in iron/steel remaining weak. Expansion was confined to large firms while medium and small enterprises remained in contraction. NBS highlighted three key sectors -- equipment, high-tech, consumer goods -- saw positive growth for the second straight month. Non-manufacturing PMI was 50.5, above consensus and prior month's 50.3, also marking a three-month high. Mainly reflected similar developments in construction (infrastructure) while services (fading holiday tailwinds) remained little changed. Inflation metrics also indicated softening deflation pressures -- input prices at 49.9 was the closest to expansion since January. Broadly based improvements lifted composite PMI to 50.7 from 50.4.

  • US trade deal pipeline remains unclear as temporary tariff pause expiry looms:

    • Early attention to start the week on latest tariff rhetoric after US talks with Canada broke down Friday over its digital services tax, though Canada later backtracked in anticipation of progress on a trade agreement (CNBC). Trump said in a Fox News interview recorded Friday that he doesn't think he'll need to extend the 9-Jul deadline imposed on countries to secure deals with the US to avoid higher tariffs (Bloomberg). Contrasted with remarks by Treasury Secretary Bessent casting doubt on the timeline, indicating there were compelling trade proposals but all deals might not be complete by 9-Jul. Suggested there were 10 or 12 deals on the shortlist that may be sealed by Labor Day. Bloomberg reprised a discussion the Trump administration is poised to fall short of its earlier targets and the only two notable precedents so far (UK, China) suggest any frameworks will be limited, leaving many specifics to be negotiated later. For Asia, India negotiators extended their stay in Washington by a day, raising hopes of an interim deal (Bloomberg). Taiwan noted "constructive progress" in a second round of trade talks (Bloomberg). In contrast, Nikkei cited the Fox Business interview, highlighting Trump's determination to keep a 25% US tariff on Japan auto imports.

  • PBOC maintains dovish stance, but no new signals:

    • Summary of the PBOC Q2 policy meeting held 23-Jun said members agreed on the necessity to implement moderately loose monetary policy, strengthen counter-cyclical adjustments, increase the coordination of monetary & fiscal policies while maintaining stable economic growth and reasonable prices. Elaboration on the path forward kept to prior major policy announcements. Still aims to maintain ample liquidity, guide financial institutions to increase credit supply, and match social financing/money supply growth with GDP and inflation targets. Also, no change to FX policy, reaffirming to goal to maintain basic yuan stability at a reasonable and balanced level. Economic assessment so far observing stable domestic dynamics with yuan seen tracking at reasonable equilibrium levels and financial markets stable. Echoed broader policy language the external environment is becoming more complex and severe, adding global growth momentum has weakened as trade barriers have increased. Despite the encouraging trajectory of the domestic economy, cautioned ongoing challenges in terms of insufficient demand and continued low prices. Market consensus polls for Q3 policy forecasts yet to be published amid a recent improvement in growth confidence after activity data have held up reasonably well and US tariff concerns recede.

  • Japan industrial production softer than expected, near-term cyclical momentum looking mostly flat:

    • Industrial production rose 0.5% m/m in May, well short of consensus 3.5% and follows a 1.1% decline in the previous month. Main growth drivers were production/general-purpose machinery and autos, mitigated by weakness in chemicals and electronic parts & devices. Strong growth in shipments left inventories notably lower. Core capital goods shipments rebounded sharply after falling for the prior two months. Going forward, METI survey projections pointed to a 0.3% increase in June (led by marked optimism in electrical machinery and IT electronics) and a 0.7% decline in July, which would leave Q2 up marginally followed by a lackluster start to Q3. However, adjusted June guidance of -1.9% portends a clear Q2 drop with a softer trajectory heading into Q3. Tone notably softer than last month where Q2 looked to be solid, though aligns with consensus GDP forecasts looking for generally flat momentum. Attention turns to tomorrow's June BOJ Tankan survey as the next key macro barometer. Consensus looks for headline large manufacturer business conditions to log the second straight decline amid headwinds from US tariffs and slower global growth. Recall BOJ Summary of Opinions for the latest June MPM underscored that much of the outlook depends on outcome of US trade deals and still no signs of a breakthrough in talks with Japan.

  • Indian equities and bonds underperform in H1:

    • MSCI Indian has returned 6% so far in H1, underperforming MSCI Asia's 12.5% gain (Bloomberg). While Indian stocks weathered April volatility better than most other markets, broader underperformance over H1 being put down to familiar concerns over elevated valuations (forward P/E of 23x vs 5Y average 21.5x) and relatively lower earnings growth. Equities have seen almost $9B of outflow so far in 2025, leaving them on track for second straight yearly outflow. Bonds also lagging with fully accessible route (FAR) securities on track for third straight monthly outflow. Since JP Morgan in 2023 announced their inclusion in its EM index. FAR bonds have seen net $20B of inflows, at low end of estimates according to Bloomberg. Rupee among few currencies to have fallen against dollar, pressured by recent bond outflows and with short positions having increased following RBI's outsized 50 bp rate cut this month (Reuters). Longer-term growth story still considered intact amid India's world-beating economic growth, political stability and supportive fiscal policy. Underweight positioning also seen benefiting bonds with foreign ownership of 3% compared to 5.8% in China. Indian bonds set for inclusion in FTSE Russell index in September.

  • Notable Gainers:

    • +14.9% 6181.HK (Laopu Gold): Laopu Gold share surged again after second lock-up expiry on 28-Jun

    • +6.1% 9501.JP (Tokyo Electric Power Co. Holdings): Government approves "emergency response" for Kashiwazaki-Kariwa Nuclear Power Plant

    • +5.6% 7733.JP (Olympus): Responses to FDA alert: to ensure quality standards

    • +2.6% 8591.JP (ORIX): to sell 17.5% stake in Greenko Energy Holdings to AM Green Power B.V. for $1.28B (¥185.74B)

  • Notable Decliners:

    • -2.2% 2899.HK (Zijin Mining Group): Zijin Gold International to acquire 100% interests in Raygorodok Gold Mine project for $1.2B

    • -1.9% 2330.TT (TSMC): TSMC second fab in Arizona ahead of schedule - Commercial Times

• Data:

  • Economic:

    • China June

      • Official manufacturing PMI 49.7 vs consensus 49.6 and 49.5 in prior month

        • Non-manufacturing PMI 50.5 vs consensus 50.3 and 50.3 in prior month

        • Composite PMI 50.7 vs 50.4 in prior month

    • Japan May

      • Industrial production +0.5% m/m vs consensus +3.5% and (1.1%) in prior month

        • METI survey projections +0.3% in June, (0.7%) in July

    • Australia May

      • Private sector credit +0.5% m/m vs consensus +0.6% and +0.7% in April

    • New Zealand June

      • ANZ Business Confidence +46.3 vs +36.6 in May

    • South Korea May

      • Industrial production (2.9%) m/m vs FactSet consensus +0.6% and revised (0.6%) in prior month

        • Industrial production +0.2% y/y vs FactSet consensus +1.8% and revised +5.1% in prior month

  • Markets:

    • Nikkei: 336.60 or +0.84% to 40487.39

    • Hang Seng: (211.87) or (0.87%) to 24072.28

    • Shanghai Composite: 20.20 or +0.59% to 3444.43

    • Shenzhen Composite: 22.30 or +1.09% to 2074.85

    • ASX200: 28.10 or +0.33% to 8542.30

    • KOSPI: 15.76 or +0.52% to 3071.70

    • SENSEX: (455.94) or (0.54%) to 83602.96

  • Currencies:

    • $-¥: (0.57) or (0.39%) to 144.0850

    • $-KRW: (13.23) or (0.97%) to 1351.2100

    • A$-$: +0.00 or +0.09% to 0.6535

    • $-INR: +0.12 or +0.15% to 85.6307

    • $-CNY: (0.01) or (0.11%) to 7.1643