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Summary:
Regional stocks mostly rose after a Nasdaq-led session on Wall Street, though China and Hong Kong lagged
The KOSPI jumped 3.4% and the Korea Exchange triggered a sidecar after the sharp rise; the KOSDAQ gained 2.8%
The Nikkei rose 1.7%, led by chip-related stocks
The US dollar was slightly softer, AUD and NZD rallied, while USD/JPY moved higher as the yen weakened broadly
Japan’s services PPI rose 3.7% y/y, up from a downwardly revised 3.5%; China’s industrial profits rebounded 14.4% y/y in September
South Korea’s Q3 GDP grew 1.0% q/q, beating forecasts on AI chip-driven exports
Oil edged lower despite continuing Saudi-Houthi exchanges, and gold traded sideways just above $4,000
Equities
Asian equities were mostly firmer on Tuesday, picking up the positive lead from Wall Street, where a Nasdaq-led session improved sentiment. Mainland China and Hong Kong were the exceptions.
South Korea led the gains. The KOSPI climbed 3.4%, and its sharp rise prompted the Korea Exchange to trigger a sidecar, a temporary halt on program trading used to cool rapid moves. The KOSDAQ added 2.8%. Third-quarter GDP data showed the economy grew 1.0% from the previous quarter, well above the 0.7% forecast, as the global AI chip boom lifted exports and investment. The Bank of Korea estimates chips are driving about half of growth, although private consumption fell for the first time in nearly four years.
In Japan, the Nikkei 225 rose 1.7%, with chip-related stocks leading the advance. In China, the Shanghai Composite slipped 0.1%, while Hong Kong’s Hang Seng fell 0.4%.
Data
Japan’s services producer price index rose 3.7% year on year in September, in line with forecasts and up from a downwardly revised 3.5% in August. The index is watched by the Bank of Japan for signs that firms are passing rising labour costs on to prices. The BoJ concludes its policy meeting on Friday and is expected to hold rates at 1.25% while signalling readiness for further hikes.
China’s industrial profits rose 14.4% year on year in September, rebounding from 4.2% growth in August. Year-to-date growth eased slightly to 15.5% from 15.7%.
Currencies
The US dollar was slightly softer across much of the board. The Australian and New Zealand dollars both rallied, with Australia’s quarterly CPI data due on Wednesday. USD/JPY moved higher, bucking the broader dollar softness, as the yen weakened across the board.
Commodities
Oil prices edged slightly lower despite continuing exchanges between Saudi Arabia and the Houthis, a reminder that Middle East supply risk remains in the background. Gold traded mostly sideways, holding just above $4,000 an ounce.
Canada
Hopes for a quick US-Canada trade agreement faded on Monday after Canadian Prime Minister Mark Carney said Ottawa has not changed its position in talks with Washington, and that any progress made so far reflects the US moving closer to Canada’s stance. The comments came as Semafor, citing sources, reported that a deal is likely not as imminent as US officials had suggested over the weekend.
This article was written by Eamonn Sheridan at investinglive.com.
