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StreetAccount Summary - Asian Market Recap: Nikkei (0.44%), Hang Seng +0.48%, Shanghai Composite +0.92% as of 04:10 ET

May 19 ,2026

• Synopsis:

  • Asia stocks ended mixed Tuesday. Japan's Nikkei fell while the Topix ended slightly higher. There were gains in Australia and New Zealand; Shanghai, Hong Kong and Singapore were also ahead. India supported by Adani group stocks. Some modest declines in Shenzhen, steepest losses in South Korea and Taiwan. Indonesia stocks fell for a sixth consecutive day. US futures turning mixed, Europe opened with solid gains. US dollar unchanged, yen weaker and briefly touching 159 per dollar again, other Asia stocks also lower. Treasuries mixed, JGB yields higher across tenors. Crude futures lower but Brent holding around $110/bl. Precious metals down, base metals also under pressure.

  • Asia stocks struggled for direction Tuesday as the lower oil price encouraged some value-hunting in the developed markets of Hong Kong and Sydney, but tech stocks sold off again, which weighed on the Nikkei, Kospi and Taiex. The MSCI Asia Pac ex Japan index fell around 1.0%. Yet broader sentiment had improved from the bell as President Trump said he had called off a planned attack on Iran following intervention from several Gulf nations that said they were close to a deal with Tehran. This sent WTI and Brent crude futures lower after the latter touched $112/bl overnight and gave relief to regional bond yields.

  • In other developments, Australia's central bank warned persistent high energy costs are a risk to the economy as they could quickly impact consumption; May's consumer sentiment data index recovered from April's 2.5-year low. Japan Q1 GDP growth of 2.1% was above forecasts but authorities warned the positive momentum would be challenged by the oil price shock. Nevertheless, economists said the strong growth could give the BOJ room to hike rates next month. Malaysia's April inflation rate accelerated to 1.9%, its highest in 18 months. The US said it would halt its probe into Gautam Adani, triggering a rally in several of his group's listed stocks.

  • Fosun International (656.JP) is looking to raise up to $500M from the Hong Kong IPO of its Club Med unit. Standard Chartered (2888.HK) plans 15% cut in corporate roles by 2030 and targets higher return by 2028. Baidu (9888.HK) AI sales topped those from its traditional internet ad revenue for the first time in Q1. US ends civil and criminal cases against Adani (Adani Enterprises, 512599.IN) after $10B investment promise and paying a $275M settlement. Reliance Industries (500325.IN) is in talks with CATL (3750.HK) over the procurement of parts for battery energy storage systems.

• Digest:

  • Trump holds off on planned strikes against Iran, talks continue:

    • President Trump revealed he held off on planned military strikes against Iran on Tuesday, to allow time for talks on an agreement to end war (Bloomberg, Axios). Said request to hold off on strikes came from leaders of Saudi Arabia, Qatar and UAE, who claimed a deal will be reached that will be accepted to US and include no nuclear weapons for Iran. Trump told reporters leaders asked him to hold off for 2-3 days and one US official said their urging was prompted by concerns about Iranian retaliation against their energy facilities. Trump was expected to meet with top national security officials on Tuesday to discuss military options and was reportedly leaning towards ordering strikes. Trump said military prepared to strike in moment's notice if no deal reached.

    • US was reportedly unimpressed by Iran's latest offer via Pakistani intermediaries, which contained no detailed commitments about suspending enrichment and turning over HEU stockpiles. US also disputed Iranian media claims it agreed to lift some sanctions on Iran oil (Axios). Movement towards resumption of hostilities prompted by ongoing diplomatic stalemate with large gaps remaining between two sides. Iran has insisted that any deal recognizes its control over Strait of Hormuz, lifting of all sanctions, and payment of reparations while leaving nuclear issue to future talks, demands largely rejected by US. Length of enrichment moratorium and fate of HEU stockpiles have been major sticking points.

  • Japan Q1 GDP a little better than expected:

    • GDP expanded 2.1% q/q annualized in Q1, above JCER consensus 1.6%, following revised 0.8% in the previous quarter. Components were broadly positive. Main driver was external demand owing to firmer than expected exports growth while imports were in line. Private and public demand also expanded. Private consumption and capex surprised slightly to the upside. Consumer demand saw the first upturn in non-durables since 4Q24, combined with steady mild growth in services, which outweighed weaker durables. Foreign tourist spending fell back mildly after sharp growth in Q4. Employee compensation increased 0.2% q/q after 0.5% in the prior quarter, marking the third increase in the past four quarters, offering some encouraging signs of growth in aggregate real incomes. Nominal GDP growth remained on a solid pace in the 3% annualized range. GDP deflator rose a steady 3.4% y/y, the sixth straight quarter in the 3% range. Latest figures left FY25 growth at 0.8%, a bit below BOJ's projection of 1.0%. Going forward, JCER poll looks for a temporary lull in growth momentum to a 0.5% annualized pace in Q1 and Q3 before picking back up towards the 1% trend. Core CPI inflation seen strengthening back above 2% by Q3 to a peak of 2.7% in 1Q27. With real incomes facing some renewed headwinds, attention turns to the permeation in pay raises after 2026 shunto talks resulted in a historic third straight year of solid gains, due to kick in from the new fiscal year starting April. Elsewhere, Middle East situation poses direct risks to external demand while there have been some concerns about the uncertainty element prompting delays in corporate investment.

  • Street Takeaways: April China activity data

    • Economist takeaways from the April China activity data noted broad-based disappointment. Industrial production was the most viable bright spot though momentum was not seen as commensurate with export strength. Details gave some indication of Middle East supply chain disruptions into certain chemical products. Sluggish retail sales consistent with waning support from the consumer goods trade-in program that was the only remaining source of policy support after EV incentives had rolled off. Biggest surprise was fixed asset investment turning negative again. With official data only provided on a YTD basis, analyst calculations indicated a sharp drop-off in April. Manufacturing and infrastructure appeared to be the swing factors given persistent weakness in real estate. GDP forecast implications skewed negative, albeit mostly in the form of acknowledging downside risks to existing forecasts. Bottom line is that Q2 consensus at around 4.7% y/y is starting to look optimistic. Economists saw the results as meaningfully weak. Middle East situation was the most intuitive factor, though there were notable views this alone was not enough to explain the undershoot. UBS suggested the quarterly growth profile generally demonstrates some seasonality as a function of policy attention -- Q1 strength is imperative to start the year on a firm footing in order to meet economic targets (especially with this year marking the start of the new Five-Year Plan), complacency sets in in Q2 until renewed urgency for policy support picks up toward Q4. Furthermore, other views pointed to ongoing fragility in corporate and consumer sentiment. In all, there was broad agreement that a government response will likely be needed, though there was some dispersion in how immediate policymakers may act.

  • Limitations of FX intervention place more onus on BOJ to curb yen weakness:

    • In extended discussions about the inefficacy of FX intervention in supporting yen, Nikkei noted the relentless pressure is evoking memories of 2024 that saw similarly limited impacts from some JPY10T ($63B) in intervention operations and USD/JPY still breached the 160 threshold that authorities were trying to prevent. Underpinning current bearish sentiment is the widespread expectation that rising fuel import prices will amplify yen selling by the corporate sector. Mizuho Bank estimates that crude oil prices at $90-100 per barrel for a prolonged period would increase Japan's nominal imports by JPY5-8T. In a notable difference vs 2024 which was skewed towards speculative short yen positions, current climate is encouraging more lasting real money selling. This suggests the latest intervention phase will be even less effective. Price dynamic is already bearing out with CGPI import prices rising sharply in April. Nomura Research Institute predicts higher prices for crude and naphtha will be passed on downstream in H2. Past intervention phase and current inflation dynamics leaving markets bracing for a BOJ rate hike in June or July. Cited board member Masu's recent speech, calling for rate hikes as soon as possible if the data shows no clear signs of economic downtown, as a signal of growing momentum for a rate hike within the central bank. In another contrast to 2024 and a headwind for yen, increased perceptions that Fed is leaning towards rate hikes rather than cuts.

  • Japan AI plays broadening amid search for value:

    • Notable reverberations from Kioxia (285A.JP) buy suspension and could not trade yesterday after publishing blowout Q1 guidance with net profit projected to surge 48-fold to more than double QUICK consensus (Nikkei). While FY guidance was withheld, confidence underpinned by memory price dynamics. QUICK-FactSet consensus points to FY EPS of JPY6,917, up seven times the previous year and revised up from five-fold in April. Moreover, Nikkei discussed how the Kioxia imbalance is seen encapsulating crowded activity in established AI-related plays and value investors are now seeking exposure via alternatives. One example discussed was Orbis Investments increasing allocations for its Japan stock fund to Daiwa House Industry (1925.JP), currently the highest weighted name as of March. Rationale was data center construction after Daiwa announced in Oct-25 that it will acquire Sumitomo Electric Industries (5802.JP), standing to provide competitive advantage in the market. While forward PER at 12.2x is lower than most general construction companies and current share price subdued by elevated materials costs, levels seen as attractive based on AI demand. Article noted the backdrop of the AI theme permeating into value strategies as certain stocks seen indirectly related to semis have seen windfall support, consistent with an increasing acceptance of AI as a long-term trend rather than a fad. Story also mentioned materials companies involved in semiconductor manufacturing processes, such as Lintech (7966.JP). The main concern is that this points to increasing correlation between value and growth, which means an AI/tech correction may induce broader ripple effects.

  • Notable Gainers:

    • +9.3% 4373.JP (Simplex Holdings): to introduce shareholder benefit program

    • +8.1% 4088.JP (Air Water): City Index Eleventh discloses 5.9% stake

    • +3.3% 2268.HK (WuXi XDC Cayman): launches up to $100M on-market share buyback

    • +1.5% 9888.HK (Baidu): reports Q1 non-GAAP EPADS CNY12.06 vs FactSet CNY11.54

    • +1.5% 9022.JP (Central Japan Railway): reports finalized April Shinkansen Tokyo Gate passenger volume +3% y/y

  • Notable Decliners:

    • -16.9% 5803.JP (Fujikura): discloses 2026-2028 mid-term plan

    • -15.1% 454910.KS (Doosan Robotics): 5M shares reportedly sold at KRW107,525/share in block trade yesterday

    • -1.0% 035420.KS (NAVER): says no decision yet on forming consortium with Uber to acquire Woowa Brothers

• Data:

  • Economic:

    • Japan Q1

      • GDP +2.1% q/q annualized vs consensus +1.6% and revised +0.8% in prior quarter

      • GDP +0.5% q/q vs consensus +0.4% and revised +0.2% in prior quarter

    • Australia May

      • Westpac-MI consumer sentiment index 83.0 vs 80.1 in April

    • New Zealand Q1

      • PPI Input +1.4% versus (0.5%) in prior quarter

      • PPI Output +0.8% versus +0.1% in prior quarter

  • Markets:

    • Nikkei: (265.36) or (0.44%) to 60550.59

    • Hang Seng: 122.67 or +0.48% to 25797.85

    • Shanghai Composite: 38.01 or +0.92% to 4169.54

    • Shenzhen Composite: 14.73 or +0.51% to 2877.17

    • ASX200: 99.40 or +1.17% to 8604.70

    • KOSPI: (244.38) or (3.25%) to 7271.66

    • SENSEX: 265.88 or +0.35% to 75580.92

  • Currencies:

    • $-¥: +0.21 or +0.13% to 159.0500

    • $-KRW: +15.96 or +1.07% to 1505.4600

    • A$-$: (0.00) or (0.65%) to 0.7119

    • $-INR: +0.12 or +0.12% to 96.3879

    • $-CNY: +0.00 or +0.02% to 6.8015