Finance Morning Brief: US Stocks Fall on Rate-Hike Bets; A-Shares Slip After Holiday as Bank Shares Hit Records

📊 Asian Markets Today

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1. Rate-Hike Bets Rise as US and European Stocks Close Lower

Source: Sina

On October 7 local time, US and European stocks closed lower, with Germany's DAX and France's CAC 40 falling more than 1%; the Dow fell 0.66%, the Nasdaq 0.22% and the S&P 500 0.22%. Minutes of the Federal Reserve's latest meeting showed a September rate hike was unanimously supported, with most participants favoring one more increase this year; officials also urged preparing for market stress.

In bonds, the US 10-year Treasury yield briefly rose to 5.364%, the highest since 2002, while the 30-year yield touched a 24-year high. Commodities and crypto weakened together: spot gold fell more than 1% to $4,110.52 an ounce; spot silver dropped over 2.5%, losing $60 to $59.75 an ounce; bitcoin fell below $83,000, and over 120,000 traders were liquidated in 24 hours, with losses exceeding $700 million.

Chip stocks mostly fell, with the Philadelphia Semiconductor Index down more than 1%; Qualcomm, SK Hynix and ARM dropped over 2%, while Micron rose more than 4%. Chinese ADRs bucked the trend, with the Nasdaq Golden Dragon China Index edging up 0.12%. Citing Iran's Fars news agency, Xinhua reported that a senior adviser to the Revolutionary Guards commander said a few "illegal channels" in the Strait of Hormuz would soon be closed.

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2. PBOC Sets Out Its Stance on the Yuan

Source: 21st Century Business Herald

On October 8, the People's Bank of China issued its policy stance on the renminbi exchange rate. According to Xinhua, the PBOC stressed that China operates a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies, and lets the market play a decisive role in exchange rate formation.

The PBOC said that since 2010 the yuan has gone through several appreciation and depreciation cycles, with two-way fluctuation more pronounced and greater flexibility. It said China's trade development stems from stronger industrial competitiveness, and China has no need and no intention to gain trade advantage through currency depreciation, and never engages in competitive devaluation.

The central bank added that global economic imbalances require joint efforts by all parties, and simply attributing a country's declining industrial competitiveness, weakened fiscal constraints and complex structural problems to other countries' exchange rates is a shirking and avoidance of one's own adjustment responsibilities.

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3. Middle East Tensions Lift Oil, Boosting A-Share Energy Stocks

Source: 21st Century Business Herald

On October 8, oil and gas exploration, petroleum and natural gas, and gas sectors rallied on China's A-share market. By the close, the two oil majors Sinopec and PetroChina both rose more than 3%, Keli shares gained over 9%, Bomeike over 8%, Tongyuan Petroleum over 7% and Shouhua Gas over 7%.

International crude futures jumped on October 8, with London Brent crude briefly rising more than 4% to $104.4 a barrel; as of publication it was up 3.73% at $103.94 a barrel, while New York crude rose more than 4% to above $91 a barrel. Citing Iran's Fars news agency, Xinhua reported that a senior adviser to the Revolutionary Guards commander said a few "illegal channels" in the Strait of Hormuz would soon be closed.

Domestic energy and chemical futures surged across the board: the fuel oil main contract jumped 18.35%, its largest single-day gain in half a year; methanol rose over 9% and crude over 8%. Among A-share port and shipping names, COSCO Shipping Energy Transportation and China Merchants Nanjing Tanker hit the 10% limit up, and China Merchants Energy Shipping rose over 9%.

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4. Chinese Bank Shares Rally After Holiday; ICBC, BOC and Hangzhou Bank Hit Records

Source: Sina Finance

On October 8, the first trading day after the National Day holiday, China's three main A-share indexes fell in early trade, but bank shares rallied against the trend. By midday, almost all 42 listed banks were in the green, with only China CITIC Bank slightly lower; ICBC, Bank of China and Bank of Hangzhou touched record-high share prices since listing.

Among the 42 constituents, only China CITIC Bank slipped 0.55%. Shanghai Pudong Development Bank and Ping An Bank rose 2.11% and 2.07% respectively, Bank of Hangzhou gained 2.05%, and Bank of Beijing and China Everbright Bank rose 1.80% and 1.64%. Intraday, ICBC touched 8.38 yuan, Bank of China 6.87 yuan and Bank of Hangzhou 17.50 yuan; the combined H-share market value of ICBC and Bank of China stood at about 2.81 trillion yuan and 2.06 trillion yuan respectively.

Analysts attributed the sector's strength to recovering half-year earnings, stabilizing net interest margins, continued insurance-fund buying and expectations of higher dividend payouts. The 2026 interim reports showed that among the 42 listed banks, 36 each posted growth in both operating revenue and net profit attributable to shareholders; the six state-owned majors recently announced raising their interim payout ratios by about 1 percentage point to roughly 31%.

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5. Shenzhen New-Home Subscriptions Up 78.5% During the Holiday

Source: Sina Finance

On October 8, quoting the Shenzhen Housing and Construction Bureau, 21st Century Business Herald reported that the city's property market saw strong supply and demand during the National Day holiday, with quality projects selling well. In new homes, from October 1 to 7, subscriptions for pre-sale of new commodity residential units rose 78.5% year on year, with several projects launching or adding units during the holiday.

During the holiday, some projects in Guangming, Bao'an and Longgang saw nearly 140 visits a day on average, up about 30% from normal. The Chaofu project in Bao'an recorded 610 million yuan in subscriptions, and the Shangchen Ruifu project in Longhua 250 million yuan. Xiao Xiaoping, dean of the Shenzhen Beike Research Institute, said the data directly reflected a positive recovery in the city's property market.

The second-hand market was also active. During the holiday, the city's leading agencies saw second-hand residential viewings rise 13.0% year on year and signed deals up 49.1%. Beike data showed about 20% of homes signed during the holiday were priced within 1.5 million yuan.

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6. Holiday Consumption: Services Expand, Intelligence Upgrades

Source: CCTV

The National Day holiday has wrapped up. Mafengwo data showed searches for "county tourism" jumped 238% month on month; Ctrip data showed the share of eastern travelers' scenic-spot orders going to third-tier cities and below rose from about 20% in 2024 to about 47%; Qunar data showed county hotel bookings rose 35% year on year.

The pull from service consumption became more evident. From October 1 to 6, foot traffic and turnover at 78 pedestrian streets and business districts monitored by the Ministry of Commerce rose 2.5% and 4.7% respectively year on year. Over the same period, trade-in of consumer goods benefited 6.392 million people, driving 33.48 billion yuan in sales.

Structural shifts in goods consumption were also notable. Suning data showed that from October 1 to 7, foot traffic at core stores rose 50% year on year and AI smart-home appliance sales rose more than 40%, with AI products topping 70% of sales for the first time; JD MALL data showed smart appliances reached 60% of units sold. Before the holiday, the National Development and Reform Commission and the Ministry of Finance issued the fourth batch of 62.5 billion yuan in ultra-long special treasury bonds this year to support trade-ins, bringing the full-year 250 billion yuan fully allocated.

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7. Hang Seng Tech Index to Expand to 50 Constituents, Effective December 7

Source: Caijing

On October 7, Hang Seng Indexes Company published the consultation conclusions on revisions to the Hang Seng Tech Index methodology. A roughly one-month consultation launched on August 10 received 49 responses, with each proposal endorsed by more than 80% of respondents.

The revisions include: removing the industry requirement, revising the six tech themes, expanding sub-themes from 16 to 24, setting the selection universe to Hang Seng Composite LargeCap and MidCap Index constituents, adopting a dual-group selection mechanism, and raising the number of constituents from 30 to 50. Of the revised 50 constituents, the existing 30 carry 90% of the weighting, 10 new market-cap-group names carry 7.2% and 10 income-growth-group names carry 2.8%.

For the dual-group mechanism, the latest plan sets two quantitative thresholds: a minimum liquidity requirement that non-existing constituents must meet average daily turnover of at least HK$100 million over the past three months; and a minimum revenue requirement that income-growth selected constituents must post annual revenue of at least HK$500 million in each of the last two consecutive fiscal years. Per the announcement, constituent changes will be published on November 20 and the rebalancing takes effect on December 7.

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8. Japan's TOPIX Launches Biggest-Ever Overhaul, 683 Firms Face Removal

Source: Futu

Japan Exchange Group on Wednesday announced the largest-ever constituent overhaul of the TOPIX. Under the new criteria, 683 companies face gradual removal and 35 will be added, with the changes taking effect from October 30. The reform will further narrow TOPIX coverage, with about $1 trillion in passive funds potentially adjusting.

This is the second phase of the TOPIX reform. The first phase ended in January 2025, cutting constituents from about 2,200 to about 1,700. After the latest changes, the number of TOPIX constituents is expected to fall below 1,000 within two years; JPX's market innovation and research arm expects at least 986 companies to remain, versus 1,636 at end-August.

The new rules focus mainly on liquidity and free-float market value. Stocks on the removal list will not leave TOPIX immediately; their index weight will be reduced quarterly until July 2028. Daiwa's chief quantitative analyst Junichi Hashimoto estimated in September that about 166 trillion yen ($1.1 trillion) in passive assets track TOPIX; UBS Japan equity analyst Chisa Kobayashi noted that although about a third of constituents could ultimately be removed, they account for less than 3% of TOPIX's total market value.

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9. Samsung's Q3 Profit Hits Record but Misses Estimates; Japan and Korea Stocks Slide

Source: Sohu

On October 8, the Nikkei 225 closed down 1.42% at 69,042.11, and South Korea's KOSPI closed down 2.35% at 6,644.27. That day, Samsung Electronics released its third-quarter earnings guidance, with profit at a record high but overall results below expectations.

Samsung expects third-quarter operating profit of 107.40 trillion won, up 783% year on year, versus analysts' estimate of 108.67 trillion won; it expects third-quarter revenue of 195 trillion won, up 127%, versus an estimate of 201.9 trillion won. AI infrastructure buildout keeps lifting memory demand, with supply of conventional DRAM, NAND and HBM all under pressure.

AMD Chief Executive Lisa Su plans to meet on Wednesday with Jeon Young-hyun, vice chairman and head of Samsung's semiconductor business. In March this year, AMD and Samsung reached a supply agreement for next-generation high-bandwidth memory (HBM) and advanced memory chips.

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10. China's Central Bank Buys Gold for a 23rd Straight Month

Source: 21st Century Business Herald

Citing a Xinhua Finance report from Shanghai on October 8, China's central bank has accelerated its gold purchases, yet the international gold market has not shaken off its recent correction. During Asian trading on October 8, London spot gold rebounded from a two-month low to trade at $4,132.66 an ounce at one point.

Data released on October 7 showed the PBOC had raised its gold holdings for a 23rd consecutive month, with September's increase the largest of this buying cycle. State Administration of Foreign Exchange data showed that as of end-September 2026, China's gold reserves stood at 77.47 million ounces, about 2,409.59 tonnes, up 740,000 ounces (about 23.02 tonnes) from end-August.

Central-bank gold buying is not unique to China. On October 5, at the annual meeting of the London Bullion Market Association, a Bank of Italy official, Altimari, noted structural changes in the global gold market since 2022, while Bundesbank President Nagel stressed gold's continued importance in international reserve assets. Analysts say central-bank buying is changing the long-term demand structure for gold, but short-term prices remain significantly influenced by interest rates, the dollar and investment flows.

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