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StreetAccount Summary - Asian Market Recap: Nikkei +1.02%, Hang Seng (1.60%), Shanghai Composite (1.18%) as of 04:10 ET

Jul 31 ,2025

• Synopsis:

  • Asia equities ended mostly lower Thursday. Greater China benchmarks all fell as the Hang Seng gapped lower and closed near its trough; Shanghai and Shenzhen were also down sharply. South Korea and Australia lost ground, India's two main benchmarks paring early losses. Singapore and the rest of Southeast Asia down. Taiwan and Japan markets held on to gains. US futures higher, Europe up again in the first hour. US dollar DXY index slightly lower but still hovering near the 100 mark, yen higher post BOJ decision, won at near three-month low after US trade deal. Crude futures down, precious metals struggling for direction, copper prices sharply down.

  • Asia equities shrugged off overnight tariff announcements to end mostly lower as investors focused on a miss to China's flash PMI reading that sent the Hang Seng and Shanghai boards lower, and earnings misses from Samsung Electronics and SK Innovation that weighed on the Kospi. Overnight, President Trump announced South Korea will see a 15% tariff on its exports to the US, and commerce secretary Lutnick declared deals with Cambodia and Thailand had been reached without providing detail. Trump also said India would face a 25% tariff and an additional penalty due to its continuing import of Russian made defense equipment and oil; India equities largely dismissing the story but the rupee fell to a near record low despite RBI intervention.

  • In other developments, the BOJ left its base interest rate unchanged at 0.5% as expected but raised core inflation forecasts on elevated food prices. This gave economists room to speculate the bank's next rate hike was closer than ever, with some speculating it could come as early as October. China official PMIs showed manufacturing unexpectedly weakened to a three-month low amid a slowdown in output and steeper declines in new export orders. Non-manufacturing PMI also missed forecasts amid softness in construction and services. Japan industrial production unexpectedly rebounded while retail sales grew faster than expected y/y. South Korea industrial production growth led by semi and auto output. Australia retail sales grew the most in more than three years as food sales recovered.

  • China Galaxy Securities (6881.HK) and CICC (3908.HK) are set to launch funds worth more than $1B in Southeast Asia, reflecting Beijing's drive for financial companies to engage regionally. JD.Com (9618.HK) is to acquire Germany's electronic retailer Ceconomy in deal worth $2.5B. Standard Chartered (2888.HK) posted a 26% gain in H1 profits and said it would begin a $1.3B share buyback scheme. Samsung Electronics (005930.KS) posted Q2 earnings metrics well below StreetAccount estimates with many of its major segments hit by one-offs or valuation adjustments. SK Innovation (096770.KS) said it expects refining margins to improve in Q3; losses deepened in Q2 on 'uncertain global economic activity, tariff impact and the decline in oil prices'.

• Digest:

  • Trump announces trade deal with South Korea, establishing 15% tariff rate:

    • In Truth Social post President Trump announced trade deal with South Korea, establishing tariff rate of 15% (Reuters, Bloomberg). Korean officials confirmed 15% tariff will also apply to autos though USTR Greer said steel and aluminum tariffs will remain same. In return Trump said South Korea will accept American cars, trucks and agricultural products. However, some uncertainty whether this will include American beef and rice, a politically sensitive area for South Korea (Bloomberg). Trump claimed South Korea will invest $350B in US, similar to Japan deal where Trump will direct investments. South Korea will purchase $100B of LNG and invest further amount of money in US with sum to be revealed within two weeks when President Lee attends White House. In social media post Lee heralded breakthrough and said tariff rate would be at level lower or equal to that of other major exporters to US, indicating South Korea would not be left worse off than other countries on sector tariffs. Lee added that $150B of $350B will be allocated to shipbuilding cooperation fund (Yonhap). Other details unclear, including how investment will be structured, funding sources and timeframe. Before Thursday's talks South Korea officials said they would also be discussing cooperation in chips, batteries and biotechnology (Reuters).

  • Trump softens edge of his latest tariff salvo:

    • President Trump threatened 25% tariff on India from Friday and additional penalties if India continues to purchase Russian oil. Recent talks have faced hurdles over India's refusal to accept genetically modified crops and resistance to opening politically sensitive agricultural and dairy sectors. Still, Trump told reporters talks continuing (Reuters) and Treasury Secretary Bessent repeated scope for higher tariffs to unwind after 1-Aug (CNBC). India had already foreshadowed talks slipping past 1-Aug though voiced optimism on direction of negotiations. Statement from Delhi said it remains committed to mutually beneficial trade deal. Trump's 50% copper tariff proved less severe than feared after he excluded refined products from duties (Bloomberg). However, White House proclamation warned refined copper may face 15% tariff from 1-Jan-2027 pending market status update from Commerce Secretary by 30-Jun-2026. Trump signed executive order increasing Brazil tariff rate from 10% to 50%, which he had previously threatened (Bloomberg, Reuters). However, delayed start date by seven days and excluded items like aircraft, energy and commodities including orange juice. Trump ended de minimis exemption, subjecting US goods imports worth $800 or less to tariffs (CNBC). However, had already ended loophole for goods from China.

  • BOJ leaves rates unchanged, revises up inflation forecasts, risks shift to balance:

    • BOJ kept the policy rate steady at 0.50%, as widely expected, by unanimous vote. Main developments came in the July Outlook Report, which contained notable upward revisions to core inflation forecasts, mainly in FY25 which was upgraded to +2.7% from +2.2%. Primary driver was food prices. While press had accurately flagged an upward revision and the underlying basis, there were no indications of the magnitude. Moreover, risks to the inflation outlook now seen balanced, after the April report saw downside skew. Yet, broader economic assessment remained largely unchanged. Reaffirmed policy adjustments to continue if forecasts remain on track. Surge in rice price expected to wane. Still foresees underlying inflation to undergo a sluggish phase alongside economic growth. Inflation seen reaching target in the second half of the projection period. Footnote acknowledged positive developments in a US-Japan trade agreement though maintained uncertainties still high related to broader global economic impacts and stressed the outlook could change considerably depending on future developments. Not much new from Governor Ueda's press conference. Echoed Deputy Governor Uchida's comment last week that US-Japan trade deal constitutes a major step forward, while stressing the need to continue monitoring developments.

  • China manufacturing PMI unexpectedly softens, nonmanufacturing activity remains largely flat:

    • Official manufacturing PMI was 49.3 in July, below consensus and prior month's 49.7. Index back to a three-month low. Production growth slowed as new orders returned to contraction while export declines deepened moderately. Inventories and outstanding orders continued declines. Inflation metrics were mixed; input prices turned positive for the first time since February as output prices logged a smaller decrease. NBS pointed to adverse weather and summer holiday effects. Non-manufacturing PMI was 50.1 also just below consensus 50.2. Follows 50.5 in the previous month to mark the lowest since Nov-24. Softening largely driven by slowdown in construction (bad weather slowed projects in some areas) while services edged down to the break-even line for the first time since February, though holidays provided usual tailwind for consumer services. Inflation dynamics similarly registered a mild upturn in input prices while output price declines eased. Composite PMI fell to 50.2 from 50.7, matching the April level. Overall, sluggish start to H2 plays into predictions of a slowdown in economic growth momentum reflecting waning effects of front-loaded exports and fiscal spending alongside support from consumer goods trade-in subsidies. However, immediate attention on US-China trade talks, seemingly headed for an extension of the tariff truce.

  • China Politburo emphasizes reducing disorderly competition while near-term stimulus seen unlikely:

    • Greater China stocks and commodity futures faltered Thursday after underwhelming readout from July Politburo meeting. Bloomberg noted top leaders put emphasis on reducing excess competition, ramping up management of overcapacity in key industries. Pointed to another Xinhua report that showed President Xi called for efforts to break "rate-race competition", highlighting so-called "anti-involution" a top policy priority now. Noted intense price wars were deepening downward spiral in corporate profits and wages meanwhile causing trade tensions with US, EU and other trade partners over Beijing's excess manufacturing capacity. SCMP noted market watchers dialed down expectations for more stimulus given robust H1 growth. Morgan Stanley economists expected muted stimulus in Q3, while modest fiscal expansion and monetary easing could materialize in Q4 if growth slows in coming months. Goldman Sachs said readout indicated China is less inclined to launch broad-based stimulus in near term. JPMorgan noted policy shift towards structural rebalancing with emphasis on anti-involution and boosting consumption.

  • Notable Gainers:

    • +9.5% 6971.JP (Kyocera): reports Q1 earnings; operating profit ahead of StreetAccount estimates

    • +1.9% 6586.JP (Makita): reports Q1 results; revenue and operating income beat FactSet estimates

  • Notable Decliners:

    • -11.1% 1913.HK (Prada): reports H1 results with revenue €2.74B vs FactSet €2.77B

    • -7.9% 096770.KS (SK Innovation): launches KRW2T placement at KRW111,000/share; confirms SK On-SK Enmove merger, effective 1-Nov

    • -5.7% 2359.HK (WuXi AppTec): confirms placing agreement for 73.8M H-shares at HK$104.27

    • -4% 028260.KS (Samsung C&T): reports Q2 results below StreetAccount estimates

    • -3% 9618.HK (JD.com): to launch voluntary public cash takeover offer for Ceconomy

    • -3% 6752.JP (Panasonic): reports Q1 results with operating profit below StreetAccount estimates

    • -2.2% 4502.JP (Takeda Pharmaceutical): reports Q1 results; revenue misses FactSet estimates

    • -1.7% 005930.KS (Samsung Electronics): reports Q2 operating profit KRW4.676T vs preliminary KRW4.60T and StreetAccount KRW6.834T

    • -0.7% 2454.TT (MediaTek): reports Q2 earnings; revenue misses FactSet estimates

    • -0.5% 6902.JP (DENSO Corp.): reports earnings with revenue ahead of FactSet estimates

• Data:

  • Economic:

    • China

      • July official manufacturing PMI 49.3 vs consensus 49.7 and 49.7 in prior month

        • Non-manufacturing PMI 50.1 vs consensus 50.2 and 50.5 in prior month

        • Composite PMI 50.2 vs 50.7 in prior month

    • Japan June

      • Retail sales +2.0% y/y vs consensus +1.8% and revised +1.9% in prior month

      • Retail sales +1.0% m/m vs consensus +0.5% and (0.6%) in prior month

      • Industrial production +1.7% m/m vs consensus (0.8%) and (0.1%) in prior month

        • METI survey projections +1.8% in July, +0.8% in August

    • Australia

      • June retail sales +1.2% m/m vs consensus +0.4% and revised +0.5% in May

        • Q2 retail turnover +0.3% q/q vs 0.0% in Q1

      • June building approvals +11.0% m/m vs consensus +1.8% and revised +2.2% in May

      • June private sector credit +0.6% m/m vs consensus +0.5% and revised +0.6% in May

      • Q2 export price index (4.5%) q/q vs consensus (3.0%) and (2.1%) in Q1

        • Import price index (0.8%) q/q vs consensus (0.4%) and +3.3% in Q1

    • South Korea

      • June industrial production +1.6% m/m vs consensus +1.6% and revised (3.3%) in prior month

        • Industrial production +1.6% y/y vs consensus +3.2% and revised (0.3%) in prior month

  • Markets:

    • Nikkei: 415.12 or +1.02% to 41069.82

    • Hang Seng: (403.60) or (1.60%) to 24773.33

    • Shanghai Composite: (42.51) or (1.18%) to 3573.21

    • Shenzhen Composite: (30.69) or (1.39%) to 2175.10

    • ASX200: (13.60) or (0.16%) to 8742.80

    • KOSPI: (9.03) or (0.28%) to 3245.44

  • Currencies:

    • $-¥: (0.18) or (0.12%) to 149.3340

    • $-KRW: (3.18) or (0.23%) to 1389.9900

    • A$-$: +0.00 or +0.47% to 0.6463

    • $-INR: (0.03) or (0.03%) to 87.6190

    • $-CNY: (0.00) or (0.04%) to 7.1910