Asia-Pacific shares mostly higher; KOSPI surges 3.4%

At a glance:

• Shares across the region were mostly higher, taking a positive cue from Wall Street where the Nasdaq drove gains; exceptions were mainland China and Hong Kong.
• South Korea’s KOSPI surged 3.4%, leading the Korea Exchange to activate a sidecar mechanism due to the steep climb; the KOSDAQ advanced 2.8%.
• Japan’s Nikkei index added 1.7%, with semiconductor shares at the forefront.
• The greenback eased moderately; the Australian and New Zealand dollars strengthened, while the dollar firmed against the yen as the Japanese currency fell across the board.
• Japan's services producer price index increased 3.7% from a year earlier, accelerating from a downwardly adjusted 3.5%; China’s industrial profits recovered to 14.4% year-on-year in September.
• South Korea’s third-quarter GDP expanded 1.0% quarter-on-quarter, surpassing expectations thanks to exports of AI chips.
• Crude prices slipped a little even as Saudi-Houthi clashes persisted; gold moved mostly sideways, hovering just above $4,000 an ounce.

Equity markets

Asian stock markets were largely stronger on Tuesday, following Wall Street’s upbeat mood guided by the Nasdaq. China and Hong Kong bucked the trend.

The strongest advances came from South Korea. The KOSPI rose 3.4%, a surge that caused the Korea Exchange to institute a sidecar – a pause in program trading intended to moderate quick movements. The KOSDAQ gained 2.8%. GDP for the third quarter came in at 1.0% quarter-on-quarter, beating the 0.7% projection, fuelled by booming global demand for AI chips that bolstered exports and capital spending. The Bank of Korea reckons semiconductors account for roughly half of growth, even as household spending dropped for the first time in almost four years.

Japan’s Nikkei 225 climbed 1.7%, propelled by semiconductor shares. Meanwhile, the Shanghai Composite edged down 0.1%, and Hong Kong's Hang Seng lost 0.4%.

Economic data

The Japanese services producer price index increased 3.7% year-over-year in September, meeting predictions and accelerating from a downward-revised 3.5% in August. The indicator is monitored by the Bank of Japan to see if companies are shifting higher labour expenses into consumer prices. The BoJ ends its monetary policy meeting on Friday; it is anticipated to keep the rate at 1.25% while indicating it is prepared to raise it further.

China’s industrial sector profits climbed 14.4% from a year earlier in September, recovering sharply from 4.2% growth the prior month. For the first nine months, the expansion slowed a touch to 15.5% from 15.7%.

Currency markets

The US dollar was a bit weaker in many pairs. The Australian and New Zealand dollars both strengthened ahead of Australia’s quarterly CPI report on Wednesday. The dollar rose against the yen, contrasting with its overall softness, as the yen depreciated widely.

Commodity markets

Oil ticked down a little even as Saudi-Houthi military actions continued, underscoring that Middle East supply risks persist in the background. Gold was largely steady, hovering just above $4,000 per ounce.

Canada trade

Expectations of a rapid US-Canada trade pact diminished on Monday, when Canadian Prime Minister Mark Carney stated that Canada’s position in negotiations remains unchanged, and that any forward movement to date is because the US has shifted toward Canada’s stance. The remarks followed a Semafor report that, citing anonymous sources, said a trade deal may not be near as US officials indicated over the weekend.