Asian equity markets ended the session in positive territory, while Tokyo remained closed for a public holiday

Indices

The principal Asian indices are displaying a mix of resilience, caution, and sector-driven rotation as investors digest both domestic and global signals. The Nikkei 225 (^N225) is currently trading at 52411.34, posting a strong daily gain of 1085.73 or 2.11538. This advance marks a new 52-week high and reflects persistent investor confidence, supported by robust earnings and expectations for ongoing pro-growth policies. The SSE Composite Index (000001.SS) is trading at 3976.5207, up 21.7307 or 0.54948, signaling cautious optimism but also subdued activity as investors weigh conflicting economic signals. The Hang Seng Index (^HSI) stands at 26158.37, having risen 251.72 or 0.97164. However, short-term micro-trends for all three indices are flat, pointing to a market-wide wait-and-see approach and limited conviction for decisive moves in the immediate term. This environment suggests traders are quick to take profits and remain nimble amid macro and policy uncertainty.

Stocks

Regional stock performance is marked by sharp sectoral rotation and volatility. In Japan, top gainers include Disco Corp. (TYO:6146) with a gain of 7.5, Sumitomo Metal Mining (TYO:5713) up 6.87, and Sumitomo Pharma (TYO:4506) up 6.62, indicating renewed interest in industrial and healthcare sectors. Conversely, semiconductor heavyweights such as Tokyo Electron (TYO:8035) and Advantest Corp. (TYO:6857) have fallen by -6.5 and -7.6 respectively, signaling sector-specific headwinds and a sensitivity to global supply chain and trade issues.

In China, mining and technology stocks lead with Zijin Mining Group (HK:2899) up 6.38 and NetEase (HK:9999) rising 6.04, reflecting a rotation into perceived resilient sectors. However, Chinese electric vehicle makers—including Geely Automobile (HK:0175), Li Auto (HK:2015), Nio Inc. (HK:9866), Xpeng (HK:9868), and BYD (HK:1211)—have suffered declines between -5 and -9, signaling continued price wars and regulatory scrutiny. In Hong Kong, tech giants like Tencent Holdings and Midea Group have experienced moderate pullbacks, reflecting selective profit-taking amid sector leadership.

Economic News

Recent macroeconomic data has been pivotal in shaping investor positioning. In Japan, the manufacturing PMI dropped to 48.5 in September from 49.7, highlighting contraction in industrial activity and demand headwinds, even as the Bank of Japan’s Tankan index for large manufacturers improved to 14. In China, Q2 GDP growth was 5.2, robust by global standards, but recent holiday data indicated weaker-than-expected consumption, raising concerns about the sustainability of the recovery. The World Bank has revised China's 2025 GDP growth forecast upward to 4.8, suggesting improved near-term prospects despite ongoing property and manufacturing sector challenges.

Economic Events

A series of key economic events is shaping the market outlook. In China, the National People's Congress, which began on October 8, is expected to provide new policy guidance and support measures. On November 5, the People's Bank of China will announce its monetary policy decision, a critical event for market expectations. In Japan, the Bank of Japan will release its quarterly economic outlook on November 7, with investors closely monitoring for signals regarding monetary policy stance and fiscal stimulus. In Hong Kong, the Hong Kong Monetary Authority will publish its financial stability report on November 10, which could influence regional risk sentiment and capital flows.

Market Sentiment

Market sentiment across Asia is cautiously optimistic, with a strong undercurrent of indecision. In Japan, the Nikkei 225’s persistent strength and supportive policy backdrop are fostering confidence, though the flat micro-trend signals point to underlying caution and readiness to react to macroeconomic surprises. In China, upward GDP revisions and the prospect of policy support are underpinning cautious optimism, but ongoing sectoral challenges—particularly in electric vehicles—and external uncertainties such as U.S.-China trade tensions weigh on the outlook. Hong Kong remains subdued, as reflected in the Hang Seng Index’s modest gains and flat trend, with investors wary of further volatility amid global policy shifts and geopolitics.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.