A-shares fall as over 4,900 stocks decline; Anthropic IPO filing lifts Japan and Korea chip stocks

📊 Asia Market Close

1. A-shares close lower as more than 4,900 stocks fall

Source: Sina Finance

China's three main A-share indices closed lower on Oct 27. The Shanghai Composite fell 1.33%, the Shenzhen Component dropped 2.5%, the ChiNext Index lost 3.41%, the Beijing Stock Exchange 50 fell 3.35% and the STAR 50 tumbled 4.81%. Total market turnover was 1.4729 trillion yuan, down 150.2 billion yuan from the previous day, with more than 4,900 stocks declining.

Sector performance was split. Electric motors, banks, port shipping and retail led gains, while software development, military equipment, digital currency and biological products lagged. Bank stocks bucked the trend, with Shanghai Rural Commercial Bank, Bank of Chongqing and Bank of Beijing among the biggest gainers. So far, 21 listed A-share banks have disclosed 2026 interim dividend plans totalling more than 260 billion yuan, of which the six major state-owned banks plan to pay about 220.989 billion yuan, more than 80% of the disclosed total.

The retail sector jumped early and then pared gains. Moiy Commercial, Shenzhen SEG, Guangzhou Grandbuy and Shanghai Join Buy hit the daily limit. An official from the Ministry of Commerce's circulation development department said wholesale and retail value added reached 11.1 trillion yuan in January-September, up 4.4% year on year, 0.7 percentage points faster than in the first half. Sinolink Securities expects the marginal recovery in retail sales to continue in the fourth quarter, supported by the "Double 11" shopping festival and the year-end consumption season.

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2. Industrial profits rise 15.5% in first nine months

Source: Sina Finance (Xinhua Finance Evening Bulletin)

Profits at China's industrial enterprises above designated size rose 15.5% year on year to 6.03734 trillion yuan in January-September, according to the National Bureau of Statistics. In September alone, profits grew 14.4%. Mining profits reached 881.37 billion yuan, up 38.2%; manufacturing profits were 4.5738 trillion yuan, up 17.0%; while profits in electricity, heat, gas and water production and supply fell 14.3% to 578.56 billion yuan.

The auto industry was a rare weak spot. Cui Dongshu, secretary-general of the China Passenger Car Association, said vehicle output in January-September was 23.37 million units, down 4% year on year, while revenue rose 2.6% to 8.0435 trillion yuan, costs rose 3.8% to 7.1627 trillion yuan and profit fell 23% to 267.5 billion yuan, for a margin of 3.3%. In September, output was 3.06 million units, revenue rose 0.6% to 1.0374 trillion yuan and profit fell 68% to 14.2 billion yuan, a margin of 1.4%, the lowest in about four years.

Other data showed imports and exports in central China reached 3.43 trillion yuan in the first three quarters, up 20.5% and a record for the period. Electricity traded through national exchanges totalled 673.7 billion kWh in September, up 17.5%, and 5.8536 trillion kWh in January-September, up 18.9%. Separate data showed South Korea's economy grew 1.0% in the third quarter, above the 0.7% expected, while Japan's core consumer prices rose 3.2% year on year in September, faster than 2.6% in August.

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3. Pop Mart third-quarter revenue falls 45%-50% as LABUBU fever cools

Source: 21st Century Business Herald

Pop Mart said in a filing on Oct 27 that its unaudited overall revenue for the third quarter of 2026 fell 45%-50% from a year earlier. By region, revenue in China fell 25%-30%, Asia-Pacific (outside China) fell 65%-70%, the Americas fell 70%-75% and Europe and other regions fell 50%-55%.

In China, offline channel revenue fell 5%-10% in the quarter while online channel revenue fell 45%-50%. The result was close to market expectations: Jeff Zhang, an Asian equity analyst at Morningstar, had cited third-party tracking data showing a sales decline of more than 50% in the quarter.

CEO Wang Ning said at the interim results briefing in August that the company would "most likely miss this year's 20% growth target", noting the very high base in last year's third quarter and greater pressure in the second half. The stock has fallen 12.12% over the past nine trading sessions. Investor Duan Yongping said on Xueqiu on Oct 21 that he would "probably buy a bit more, but not more than 10% of the company". Wang said the Twinkle Twinkle series quickly filled the gap left by LABUBU, with revenue of 2.65 billion yuan in the first half of 2026, up 580.6% and accounting for 15.4% of the total.

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4. HSBC posts 32% jump in pre-tax profit but shares slide

Source: Sina Finance (Xinhua Finance, reporter Zhang Yadong, London)

HSBC's latest quarterly report showed strong results, yet the stock still led declines among FTSE 100 constituents on Oct 27. Third-quarter pre-tax profit was US$9.63 billion, up 32% from US$7.30 billion a year earlier, while post-tax profit rose 38%. The gain was driven by higher interest income and continued expansion of its international banking business; net interest income reached US$9.3 billion in the quarter, up 6% year on year.

The bank kept its quarterly dividend unchanged at US$0.10 per share and said it would complete a new US$1 billion share buyback by the end of 2026.

Despite the results, the shares fell sharply. The stock closed at 13.65 pounds on Oct 26 but opened at 13.01 pounds on Oct 27 and fell as low as 12.63 pounds during the session. The drop is tied to the autumn budget due on Oct 28: with public finances stretched, markets are rife with speculation that Britain will raise taxes on banks, and bank shares have fallen through the month. Standard Chartered reports on Oct 28 and Lloyds Banking Group on Oct 29.

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5. Nikkei rises 1.7% to 63,268 as AI and chip stocks lead Tokyo

Source: Yahoo Finance (Associated Press)

Most Asian benchmarks gained on Oct 27, with Tokyo and Seoul lifted by buying of AI-related stocks. Tokyo's Nikkei 225 added 1.7% to 63,268.37. Chip-testing equipment maker Advantest jumped 9.6% and OpenAI backer SoftBank Group climbed 5%.

On Wall Street overnight, the S&P 500 rose 0.7% on Monday, recovering last week's losses and pulling within 1.8% of its all-time high set earlier this month. The Dow added 0.3% and the Nasdaq composite climbed 0.8%. The strongest lift came from Nvidia, which rose 2.4% and recovered some ground after three straight losing weeks.

Other AI stocks remained unsettled on worries that rising borrowing costs could threaten the boom. Anthropic disclosed details of its losses and revenue on Monday ahead of its IPO, while SpaceX, Elon Musk's rocket company that also runs xAI, swung after announcing a roughly US$40 billion deal with an entity managed by Apollo Global Management to lease AI computing power. Alphabet and Microsoft report on Wednesday and Amazon on Thursday.

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6. KOSPI jumps more than 4% intraday as memory chip giants rally

Source: Sina Finance

Japanese and South Korean stocks opened sharply higher on Oct 27. The KOSPI opened up 3.46% at 5,658.65 and the Nikkei 225 opened 0.61% higher at 62,569.08. Both extended gains, with the KOSPI up 4.02% and the Nikkei up 2.13% during the session. Korea's memory chip duo rallied, with SK Hynix up more than 7% and Samsung Electronics up more than 5%; in Japan, SoftBank Group rose more than 5% and Kioxia more than 2%.

Nomura said in a research note on Oct 25 that the recent sharp selloff in global memory stocks reflected an "overreaction" to concerns about AI investment. It said the memory chip shortage will last until 2028 and that valuations in the sector are now "severely undervalued". With AI capex still resilient and supply unable to expand quickly, Nomura kept a positive view on the memory industry and named Samsung Electronics and SK Hynix as key stocks to watch.

Overnight in the US, Anthropic's IPO filing and Meta's equity financing plan revived confidence in the AI story. The Philadelphia Semiconductor Index rose 2.82%, Tower Semiconductor gained 6.68%, Arm Holdings 6.19%, Texas Instruments 4.72% and Intel 4.04%.

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7. TSMC to raise advanced packaging prices by up to 20%

Source: Sina Finance

TSMC plans to raise prices for advanced chip packaging services by as much as 20% as surging AI demand keeps semiconductor supply chains tight, the Commercial Times reported, citing people familiar with the matter.

Foundries and outsourced semiconductor assembly and test (OSAT) providers are preparing a new round of price increases, with CoWoS packaging quotes set to rise 10%-20%. The technology is widely used in high-end AI processors. Demand for CoWoS has expanded from GPUs to server CPUs and custom ASICs, and longer AI chip testing times have added to packaging and testing capacity pressure. Lead times for chip equipment have stretched from three to six months to six to eight months.

TSMC chairman C.C. Wei said recently that CoWoS remains customers' first choice, that five-reticle-size packaging has entered mass production with good yields, and that the company is developing nine- and fourteen-reticle versions as well as CoPoS technology to serve larger packages and lower costs. CoWoS capacity is expected to move above 130,000 wafers a month in 2026, with a target of 200,000 in 2027.

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8. Anthropic's IPO filing lifts Asian chip stocks, but not China

Source: Fortune

Asian stocks rallied on Tuesday after Anthropic filed for an eagerly anticipated initial public offering, reviving enthusiasm for battered AI, tech and semiconductor shares across the region. The filing showed first-half revenue of US$16.3 billion, up from US$1.2 billion a year earlier, an operating loss of US$693 million that narrowed from US$2.1 billion, and a net loss of US$80.7 billion. The company plans to list on the Nasdaq Global Select Market under the symbol "ANT".

Media reports say Anthropic is targeting a valuation of between US$1.5 trillion and US$2 trillion, which would make it one of the largest listings on record. South Korea's KOSPI rose 3.1%, with Samsung Electronics and SK Hynix up 4.2% and 5.2% respectively. Japan's Nikkei 225 rose 1.7%, SoftBank gained 5.0% and Advantest jumped almost 9%.

Chinese stocks did not get a boost. Hong Kong's Hang Seng fell 0.7% and the CSI 300 dropped 1.3%. SMIC fell 1.3%, robotics maker Unitree dropped 4.8% and AI chip designer Cambricon fell 5.7%; Z.ai was an exception, rising 8.9%. Gary Ng, senior Asia-Pacific economist at Natixis, said that if Anthropic's outlook is convincing with high profitability, more AI infrastructure spending can translate into more sales and stronger pricing for Japanese and South Korean supply chains. Alicia Garcia Herrero, the firm's chief Asia-Pacific economist, said Hong Kong and mainland markets sit outside the main US AI supply chain: export controls keep the most advanced chips out of Chinese hands, and users can already turn to cheaper domestic models such as DeepSeek.

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9. Lula's surprise re-election sends Brazil stocks down 14%, triggering circuit breaker

Source: Jin10 Data

Brazilian President Luiz Inacio Lula da Silva's surprise re-election triggered a sharp selloff in the country's stocks, currency and other financial assets, hurting global investors who had bet on his defeat.

LSEG data showed the real plunged nearly 8% against the dollar on Monday, its biggest one-day drop since 1999. Brazil's benchmark stock index fell 14%, its worst single-day loss since the outbreak of the COVID-19 pandemic, triggering a circuit breaker that forced the exchange operator to halt trading temporarily. Global investors had piled into Brazilian assets: in early October's first round, former president Jair Bolsonaro's eldest son Flavio Bolsonaro led Lula and markets bet he would win. But with more than 99% of votes counted, Lula took 51.8% to Bolsonaro's 48.2%.

Petrobras fell 8% in Sao Paulo, financial services firm XP plunged 48%, US-listed Nu Holdings dropped 17% and e-commerce group MercadoLibre fell 7.8%. Goldman Sachs economists Alberto Ramos and Panteleymon Semka said the most important signal for investors is who becomes finance minister, and that fiscal sustainability remains the primary anchor for pricing Brazilian sovereign risk.

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10. Central bank week begins as traders price a Fed hike in December

Source: The Straits Times

The Federal Reserve, European Central Bank and Bank of Japan all meet this week. Economists expect all three to hold rates steady, leaving the focus on policymakers' comments for signals on the rate outlook. Traders are pricing in a Fed rate hike in December. The yield on the 10-year US Treasury note was steady at 4.992%, below the 5% level it breached in September.

The Bank of Japan decides on Oct 30, with the yen last at 157.72 per dollar. The Japanese central bank is widely expected to declare victory in a nearly 14-year battle to hit its 2% inflation target and to emphasise the risk that prices could overshoot.

Elsewhere, Brent crude futures eased 0.7% to US$114.95 a barrel, drifting from a six-month high as investors weighed the potential for a resolution in the US-Israeli war with Iran. More than a third of S&P 500 companies report earnings this week, including Alphabet, Microsoft and Amazon. James Ooi, chief market strategist at Tiger Brokers, said Anthropic's decision to proceed with an IPO filing amid recent volatility in the AI trade may itself be seen as a vote of confidence.

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