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StreetAccount Summary - Asian Market Recap: Nikkei +2.12%, Hang Seng (1.43%), Shanghai Composite (0.81%) as of 04:10 ET

Oct 31 ,2025

• Synopsis:

  • Asia equities ended mixed Friday. The Nikkei and Topix indexes outperformed and closed at fresh record highs with the Nikkei again outperforming. There was a modest gain for South Korea to cap a stellar month, several Southeast Asia boards were also higher. Some weakness in Taiwan, Greater China benchmarks all lower, India and Singapore trading lower. Australia flat. For the week, the Kospi again outperformed with the Taiex in tow, while the Hang Seng and ASX underperformed in Asia-ex. Japan's Nikkei added 5.4%. For October, the Kospi added almost 17% and the Taiex nearly 8%; the Nikkei gained more than 12% in US dollar terms. US futures higher, Europe slightly lower in opening trades. US dollar consolidating overnight strength, Asia currencies largely weaker but yen bounced back from yesterday's weakness. Crude futures lower, precious metals mixed, base metals also mixed.

  • Japan's equity rally continued as the Nikkei 225 again comfortably outperformed the Topix and closed above 52K for the first time. Stocks supported by quarterly results from Amazon and Apple overnight while Senae Takaichi's appointment as PM and BOJ's decision to hold indicated the fiscally expansive, loose monetary policies will likely continue. However, after the close, Tokyo Electron disappointed with its forward outlook in a potential warning over AI's hype. South Korea's Kospi ended at a record high as its stock 'value-up' program continued as optimism improved over its economy and the signing of a trade deal with the US. China equities unresponsive to Trump-Xi meeting Thursday with many analysts describing the agreement as more a fragile détente than an agreement, with hard work still be done before a final deal is signed.

  • Elsewhere, China official PMIs showed manufacturing contracted by more than expected in October to a six-month low; declines in new orders and new export orders also accelerated. Non-manufacturing PMI edged higher. Tokyo core inflation accelerated by more than expected. Japan unemployment rate steady, industrial production rebounded by more than forecast but retail sales growth underwhelmed. South Korea September industrial production growth positive and retail sales also returned to growth.

  • Denso (6902.JP) cut its FY operating profit outlook on unfavorable exchange rates and quality control provisions. Japan trading house Sojitz (2768.JP) has begun importing rare earths from Australia for the first time to counter China's lead. BYD (1211.HK) profit declined 35% on declining domestic conditions with total EV deliveries falling 1.8% y/y. Air India is looking for $1.1B lifeline from owners Tata Group and major shareholder Singapore Airlines (C6L.SP). ANZ Bank (ANZ.AU) is to report a $1.1B profit hit from various restructuring charges.

• Digest:

  • US and China agree to de-escalate, but underlying tensions remain:

    • Takeaways from US-China trade truce fairly uniform with deal mostly tamping down recent escalation of tensions instead of resolving underlying differences. From near-term economic perspective, 10% fentanyl tariff cut estimated to drive fractional boost to China exports and GDP while reduced uncertainty creates more favorable environment for business sentiment and capex. Also positive implications for global supply chains from China delaying planned rare earths export curbs. Agreement still considered tenuous amid potential for another tit-for-tat escalation over ongoing sources of tension. China still holds tight grip on rare earths exports, US could still expand tech export controls, US demands for China to rebalance economy have gone unheeded with Beijing prioritizing advanced manufacturing over next five years. Also uncertainty related to remaining 10% fentanyl tariff and 24% reciprocal tariff that was suspended for a year. From a strategic perspective, truce seen buying time for both sides to reduce dependence on the other with Beijing pushing to develop domestic AI chips and US accelerating efforts to build alternative supplies of rare earths.

  • China manufacturing PMI in contraction for seventh straight month in October:

    • Official manufacturing PMI was 49.0 in October to six-month low, below consensus 49.6 and 49.8 in prior month, extending contraction streak into seventh month. Production fell into contractionary zone for first time since April as declines in new orders and exports worsened. Raw material inventory logged bigger decline. Employment and finished goods inventories both fell slightly. Margin compression continued with input prices posted lower growth while output prices were in bigger declines. Non-manufacturing PMI was 50.1, compared with consensus and prior month, both at 50.0. Services improved slightly to 50.2 from 50.1, supported by strong momentum in transportation, hotel, tourism and entertainment due to Golden Week holiday. Meanwhile insurance and real estate services were soft. Construction remained in contraction for third straight month. Composite PMI fell to neutral level of 50.0 from 50.6 in September.

  • Tokyo inflation firmer than expected, jobless rate steady:

    • Tokyo core CPI rose 2.8% y/y in October, above consensus 2.6%, following 2.5% in the previous month. Similarly, ex-fresh food & energy inflation climbed 2.8% vs consensus 2.5% and prior month's 2.5%. Main factor was a stabilization in water utility rates after fees were scrapped in September. Energy contributions were little changed, anchored by an estimated 0.24 ppt drag from electricity and gas subsidies. Pressure from non-fresh food prices continued to soften alongside closely watched rice prices. Goods prices outside of utilities were little changed on net while services inflation edged higher driven mostly by telecom/leisure component. Unemployment rate was steady at 2.6% in September compared to consensus 2.5%. Sharp sequential increase in total employment was matched by labor force. Job offers to applicants ratio was also unchanged at 1.20, matching expectations. Fourth straight decline in offers was negated by similar dip in applications. Overall implications limited with core inflation in its fourth year above the BOJ's 2% target while monthly labor market statistics failing to reflect the true nature of chronic supply shortages. BOJ discussions have revolved around underlying trend inflation (though opaque given there is no one indicator that can be referenced) and labor supply-demand balance largely represented by the BOJ Tankan employment conditions DI.

  • Japan industrial production somewhat above consensus, retail sales below:

    • Industrial production rose 2.2% m/m in September, above consensus 1.5%. Follows a 1.5% decline in the previous month, marking the first positive reading in three months. Main drivers were general production equipment, chemicals and metal products. Output was stronger than shipments, though inventories still rebounded moderately from the prior month's contraction. Core capital goods shipments rose for the first time in three months. Going forward, METI survey projections point to an increase of 1.9% in October and a 0.9% slide in November. While this implies solid growth in Q3, METI adjusted October estimate of -0.5% would leave the quarter flat. Retail sales rose 0.3% m/m, below consensus 0.8%, following a 0.9% decline in August marking the first increase in three months. Sequential growth in autos (albeit a partial rebound from August weakness), appliances and fuel slightly outweighed a sharp drop in apparel while food & beverages edged lower for the third straight month. After stripping out support from overseas tourists, underlying theme has been defensive consumption attitudes in response to inflation and lack of real wage growth. Attention starting to turn to 2026 shunto wage talks, though real wages likely to see more support from an expected moderation in inflation rather than accelerated pay raises. Rengo will maintain its headline growth target of 'at least 5%' as efforts shift to broader compliance particularly among smaller firms struggling to keep up.

  • Apple predicts China revenue rebounding on iPhone 17 sales:

    • Apple's (AAPL) Q4 results signaled ongoing revenue challenges in its China market, where sales declined ~4% and reversed a similar sized increase in prior quarter. Still, CEO Tim Cook remained positive on China market, attributing the revenue decline to supply constraints, which he spun as a positive (Bloomberg). A key focus of the results was management guiding overall revenue growth of 10-12% in Q1, well above expectations for growth of ~6%. Guidance largely reflects anticipation of strong iPhone 17 sales with Cook predicting double-digit growth in the quarter (Reuters). Follows media reports this month suggesting strong upgrade demand for new iPhone 17 in US and China (FT). Cook didn't outline extent of China contribution to current quarter revenue though noted Apple store traffic there is up significantly, and he expects a return to growth in Q1. Analysts estimated iPhone 17 and iPhone 17 Pro sales were up 29% y/y in first two weeks of October, pointing to likely catalysts from China's Golden Week holiday, and Singles' Day shopping event that was brought forward from November. iPhone Air shipments to China also did not occur until 22-Oct due to regulatory delays.

  • Notable Gainers:

    • +10% 3711.TT (ASE Technology Holding): reports Q3 EPS NT$2.50 vs FactSet NT$2.01

    • +8.7% 9532.JP (Osaka Gas): reports H1 net income attributable ¥94.86B, +87% vs year-ago ¥50.80B; guides FY26 net income attributable ¥142.00B vs prior guidance ¥127.00B

    • +3.6% 7741.JP (HOYA Corp): reports Q2 net income attributable ¥55.43B vs FactSet ¥55.92B; declares interim dividend ¥125/share vs year-ago ¥45/share

    • +2.2% 7012.JP (Kawasaki Heavy Industries): report of setting to win around $1.5B (¥231B) NYC subway car contract

    • +0.7% 105560.KS (KB Financial): reports Q3 operating profit KRW2.335T vs StreetAccount KRW2.201T; declares Q3 DPS KRW930 vs year-ago KRW795

  • Notable Decliners:

    • -6.5% 753.HK (Air China): reports Q3 net income attributable CNY3.68B, (11%) y/y; conducts private placement at CNY6.57/share to raise up to CNY20B

    • -6.5% 6752.JP (Panasonic): reports Q2 net income attributable ¥70.9B vs StreetAccount ¥90.26B

    • -4.5% 4188.JP (Mitsubishi Chemical): guides FY26 net income attributable ¥125.00B vs prior guidance ¥145.00B

    • -4.5% 4568.JP (Daiichi Sankyo): reports Q2 net income attributable ¥45.3B vs FactSet ¥89.38B; guides FY26 net income attributable ¥288.00B vs prior guidance ¥300.00B

    • -4.2% 096770.KS (SK Innovation): reports Q3 net income attributable (KRW107.86B) vs StreetAccount (KRW25.25B)

    • -4.1% 7201.JP (Nissan Motor): guides FY revenue ¥11.700T vs prior guidance ¥12.500T and FactSet ¥12.052T

    • -0.7% 1925.JP (Daiwa House Industry): launches tender offer for 50.7% stake in Sumitomo Densetsu at ¥9,760/share

• Data:

  • Economic

    • China

      • October official manufacturing PMI 49.0 vs consensus 49.6 and 49.8 in prior month

        • Non-manufacturing PMI 50.1 vs consensus 50.0 and 50.0 in prior month

        • Composite PMI 50.0 vs 50.6 in prior month

    • Japan

      • October Tokyo core CPI +2.8% y/y vs consensus +2.6% and +2.5% in prior month

        • CPI excl. fresh food & energy +2.8% y/y vs consensus +2.6% and +2.5% in prior month

        • Overall CPI +2.8% y/y vs consensus +2.4% and +2.5% in prior month

      • September unemployment rate 2.6% vs consensus 2.5% and 2.6% in prior month

        • Job offers to applicants ratio 1.20 vs consensus 1.20 vs 1.20 in prior month

      • September industrial production +2.2% m/m vs consensus +1.5% and (1.5%) in prior month

        • METI survey projections +1.9% in October, (0.9%) in November

      • September retail sales +0.5% y/y vs consensus +0.7% and revised (0.9%) in prior month

        • Retail sales +0.3% m/m vs consensus +0.8% and revised (0.9%) in prior month

    • Australia

      • September private sector credit +0.6% m/m vs consensus +0.6% and +0.6% in August

      • Q3 PPI +1.0% q/q vs +0.7% in Q2

        • PPI 3.5% y/y vs +3.4% in Q2

    • South Korea

      • September industrial production (1.2%) m/m vs FactSet consensus 0.0% and revised +2.2% in prior month

        • Industrial production +11.6% y/y vs FactSet +8.0% and revised +0.7% in prior month

  • Markets:

    • Nikkei: 1,085.73 or +2.12% to 52411.34

    • Hang Seng: (376.04) or (1.43%) to 25906.65

    • Shanghai Composite: (32.11) or (0.81%) to 3954.79

    • Shenzhen Composite: (8.18) or (0.32%) to 2509.59

    • ASX200: (3.60) or (0.04%) to 8881.90

    • KOSPI: 20.61 or +0.50% to 4107.50

    • SENSEX: (244.64) or (0.29%) to 84159.82

  • Currencies:

    • $-¥: +0.14 or +0.09% to 154.2870

    • $-KRW: (4.38) or (0.31%) to 1424.9100

    • A$-$: (0.00) or (0.24%) to 0.6539

    • $-INR: +0.13 or +0.15% to 88.7616

    • $-CNY: +0.00 or +0.04% to 7.1135