Finance Morning: US Stocks Hit Records, Asia Slips; RBI Hikes, Brent Back Above $100

📊 Asian Markets Today

Note: Mainland Chinese markets were closed for the National Day holiday; the Shanghai, Shenzhen and ChiNext figures are the last close before the holiday.

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1 | S&P 500 and Nasdaq Set Fresh Records as Most Asian Markets Pull Back

Source: The Asahi Shimbun

US stocks rose on Tuesday, with the S&P 500 and Nasdaq Composite setting fresh all-time highs. The S&P 500 rose 0.6% to a record 7,818.93, topping its August peak; the Dow Jones Industrial Average added 0.5% to 51,521.28, and the Nasdaq Composite gained 0.4% to close at 27,599.79. Analysts expect S&P 500 companies to deliver earnings-per-share growth of nearly 30% for the third quarter, which would mark a third straight quarter of growth above 25%.

Even as Wall Street rallied, most major Asian markets retreated on Wednesday. The Nikkei 225 fell about 0.9% and South Korea's KOSPI also slipped, while Australia's S&P/ASX 200 edged up 0.1%; markets in Shanghai were closed for the national holiday.

Ng Jing Wen of Mizuho Bank said in a commentary that the rally reflected confidence that corporate earnings, particularly across technology and AI-related sectors, can withstand elevated energy costs and restrictive interest rates. "The resilience suggests investors continue to prioritize earnings momentum over near-term inflation risks," she said.

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2 | Brokerages See A-Shares Improving After the Holiday, Tech Back in Favor

Source: The Paper (澎湃新闻)

Global markets diverged during China's week-long National Day break. Wind data showed that for Oct. 1 to Oct. 7 (as of 16:00 Beijing time), the Nikkei 225 led the world with a 4.92% gain; among US indexes, the Nasdaq rose 2.75%, the S&P 500 2.19% and the Dow 1.21%. European markets were mixed: Germany's DAX rose 0.99%, Britain's FTSE 100 fell 0.61% and France's CAC 40 dropped 1.25%. The Hang Seng fell 1.96% and South Korea's market lost 0.50%.

Ahead of the A-share market's reopening, several brokerages were optimistic. Zheshang Securities said a return of post-holiday capital should help A-shares improve from pre-holiday levels; Dongwu Securities expected a rebound, noting that the "National Day effect" typically lifts market activity after the break; Huajin Securities said the geopolitical and liquidity risks investors had feared largely failed to materialize during the holiday, so A-shares may recover.

On positioning, tech was the common pick. Changjiang Securities noted that tech stocks held up even after the 10-year US Treasury yield broke above 5.3%, showing investors will still pay high valuations for certainty; Dongwu Securities advised "tech as offense, balance elsewhere," favoring AI hardware whose earnings are most likely to be confirmed by third-quarter reports.

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3 | China's Commodity Price Index Hits 4.5-Year High

Source: Xinhua Finance

China's September Commodity Price Index (CBPI), compiled by the China Federation of Logistics & Purchasing (CFLP), came in at 137.6 points, up 4.1% month-on-month and 22.9% year-on-year, the highest since March 2022, CFLP said on Oct. 5. Driven by higher international crude prices, tighter supply of some products and rising production costs, the energy and chemicals sub-indexes jumped 14.8% and 13.7% respectively.

CFLP said the commodity market's activity improved further as the traditional production and construction season began, major projects accelerated and manufacturing output and demand kept improving. Industry insiders noted that imported risks remain high and faster raw-material price gains are adding pressure on downstream firms, calling for closer monitoring of key commodity markets.

Other data released at the same time showed that cross-region passenger trips reached 30.539 million on Oct. 4, up 1.3% year-on-year, while 2026 National Day box office (including presales) topped 800 million yuan.

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4 | L'Oréal Faces 760 Talc Lawsuits, Weighs Spinning Off Liability

Source: Sina Finance

Foreign media reported that L'Oréal has hired restructuring advisers to study carving out its talc-related liabilities into a separate legal entity and selling it, in a bid to transfer potential "talc causes cancer" risk. As of June 30 this year, about 760 talc lawsuits were pending against L'Oréal in the United States, plus thousands of hair-straightener cancer claims.

The report said L'Oréal's US subsidiary is working with law firm Weil Gotshal & Manges and investment bank Ducera Partners to handle individual lawsuits over illnesses allegedly linked to its talc-containing products. The approach resembles Honeywell's move last year to shift asbestos-related liabilities into a new entity.

Asked whether talc-containing products are sold in mainland China, a customer-service representative at L'Oréal's official flagship store on JD.com said products sold in domestic stores are all brand-direct and meet national quality, hygiene and safety standards, but did not directly answer whether products containing "carcinogenic talc" raw material are sold. L'Oréal's US subsidiary has denied the allegations, saying the claims lack legal and scientific basis.

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5 | Hong Kong MPF: Average Member Up HK$20,287 Year-to-Date

Source: Stockstar

GUM released its third-quarter 2026 MPF scorecard on Oct. 7. The MPF rose 0.5% in the third quarter, a second straight quarter of positive returns; it gained 0.5% in July and 1.5% in August, before falling 1.5% in September on Fed and HKMA rate hikes and high US Treasury yields. The average member earned HK$1,762 in the third quarter and HK$20,287 year-to-date.

As of Sept. 30, the GUM MPF Composite Index stood at 3,042 points, up 6.2%; the Equity Fund Index at 445.5, up 8.3%; the Mixed Asset Fund Index at 307.5, up 6.9%; and the Fixed Income Fund Index at 133.4, up 0.4%.

GUM chief investment officer Lau Ka-hung noted the Fed's September hike was its first since 2023 and markets expect possibly one more by year-end, while the 10-year US Treasury yield hit its highest since 2007. He said the global economy shows no sign of recession yet. Among asset classes, Asian equity funds were the best performer year-to-date with a 24.3% return, while Hong Kong equity funds were the worst, down 3.8%.

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6 | BOJ's Ueda: Financial Conditions Still Loose After Rate Hike, Watching Inflation

Source: Xinhua Finance

Bank of Japan Governor Kazuo Ueda said on Oct. 6 that financial conditions remain accommodative despite the central bank's September rate increase, and that policy is not yet restraining economic activity. He was speaking at a national securities conference in Tokyo.

Ueda said Japan's underlying inflation is gradually approaching the 2% target, but the risk of prices overshooting is rising. He cited Middle East tensions, growing AI demand and a weaker yen as factors that could push prices higher. He stressed that too-fast inflation could hurt the economy and that underlying inflation should be kept stable around 2%, adding the BOJ will keep considering rate hikes based on economic, price and financial conditions.

The BOJ raised its policy rate to 1.25% from 1.0% in September, its first hike in just three months and faster than its previous roughly once-every-six-months pace. Markets are watching whether the BOJ will hike again at its next meeting on Oct. 29-30.

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7 | AI Boom Reshapes Korea's Market: Local Money Buys Chips, Foreigners Sell

Source: PANews

Citing Korean media DAUM, Korean Exchange data shows the AI boom is reshaping South Korea's stock market. Between Jan. 2 and Oct. 2, 2026, fund flows diverged sharply: local money concentrated in core AI-supply-chain chip stocks, while foreign investors cut holdings heavily.

Korean retail investors net bought 43.1143 trillion won of Samsung Electronics and 39.5028 trillion won of SK Hynix this year; institutions also bet on chips, net buying 11.6193 trillion won of Samsung and 8.5265 trillion won of SK Hynix. By contrast, foreign investors net sold 84.5702 trillion won of Samsung and 82.5040 trillion won of SK Hynix, and also trimmed Hyundai Motor and SK Square.

Analysts said that with US Treasury yields in the 5% range, the market is focusing on industries with clear earnings power, and semiconductors and IT hardware driven by AI infrastructure investment should remain core allocations.

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8 | Taiwan Stocks Outpace Korea in 2026 on Broader AI Supply-Chain Exposure

Source: Lianhe Zaobao

Taiwan's Taiex has risen 72% so far in 2026, beating South Korea's KOSPI by about seven percentage points and ranking best among more than 90 stock indexes tracked by Bloomberg. The Taiex outperformed the KOSPI by about 23 percentage points in the third quarter, the widest quarterly gap since the turn of the century.

Bloomberg noted Taiwan has deeper links to the AI supply chain, giving investors exposure to chip design, manufacturing, packaging, networking equipment and servers, and thus more channels to benefit as AI spending grows. Analysts' upgrades to Taiwanese corporate earnings forecasts also outpaced those for Korean firms for the first time since March 2025.

A Bank of America fund-manager survey in September found 40% of respondents were overweight Taiwan versus 25% for Korea; asked which market would benefit most from the next AI investment cycle, 35% chose Taiwan and only 5% Korea. Korea's outperformance has been highly concentrated in Samsung Electronics and SK Hynix, and the market has begun to question how long the memory-chip price upcycle can last.

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9 | Asia Stocks Slip as India's Central Bank Hikes and Brent Tops $100

Source: Investing.com

Asian stocks fell on Wednesday, failing to join an overnight Wall Street rally to records, as elevated bond yields and renewed gains in oil prices kept investors cautious. Singapore's Straits Times Index dropped 1.5%, while Australia's S&P/ASX 200 was roughly flat.

Attention turned to the Reserve Bank of India, which raised its benchmark repo rate by 25 basis points to 5.5%, its first hike in nearly four years. The six-member Monetary Policy Committee voted unanimously and shifted its stance to "calibrated tightening," signaling scope for further increases if inflation and growth warrant. India's Nifty 50 fell 0.5%.

On oil, Brent crude rose above $101 a barrel and US West Texas Intermediate approached $90 after Iran-backed Houthi attacks in Saudi Arabia heightened concerns about Middle East supply. The US 10-year Treasury yield held around 5.3% and the 30-year was above 5.6%, keeping long-term borrowing costs near multi-year highs. Investors were also awaiting minutes of the Fed's September meeting.

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10 | Dalio Warns the AI Investment Boom Is a "Classic Bubble"

Source: Jinshi Data

Bridgewater founder Ray Dalio warned that the AI investment boom has become a "classic bubble." With big tech increasingly relying on debt to fund AI infrastructure expansion and global rates staying high, the market is approaching the point where the bubble could burst.

Speaking at the Forbes Global CEO Conference in Singapore on Wednesday, Dalio said a large amount of debt is now being used to finance AI investment, and that when financing costs keep rising, such capital-intensive expansion faces growing pressure. "We're not there yet, but we're getting close," he said.

Dalio's concern is not whether AI technology will keep advancing, but whether the capital spending and asset prices built around AI can be sustained at the current pace. He noted the pressure is not yet clearly reflected in US big-tech share prices, but gains are increasingly concentrated in a few companies that directly benefit from AI capex. He also pointed to discussions of wealth taxes and taxes on unrealized capital gains, which could force investors to sell assets to raise cash for taxes and act as an external trigger for a bubble to pop.

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