Finance Morning | China Steps Up Market Support; Indonesia Stocks Plunge 11% on MSCI Downgrade Warning

📊 Asian Markets Today

Most major Asia-Pacific stock markets closed higher on October 16, recovering some sentiment after the previous day's heavy tech selloff, while Indonesian shares plunged more than 11% after MSCI moved to reclassify the country. Here are today's top stories.

1. China Steps Up Measures to Stabilise Its Stock Market

Source: Lianhe Zaobao

China is taking steps to stabilise its stock market, including encouraging companies and "national team" funds to buy shares while guiding some investors to reduce selling, according to people familiar with the matter. Bloomberg reported that China's financial regulators held a meeting on Thursday (October 15) to study measures supporting the smooth operation of the market.

Authorities have also given window guidance to several large insurers, requiring them to report their equity holdings, avoid cutting losses on positions underwater, and align their investment decisions with broader economic goals. At the same time, regulators are calling on "national team" funds to step up market entry. The report said the coordinated moves reflect growing concern over market fragility and a push to prevent selling pressure from spreading into a vicious decline.

Earlier this month, the China Securities Regulatory Commission pledged to keep strengthening market-stabilisation mechanisms, broaden medium- and long-term funding sources and channels, encourage eligible listed companies to increase dividends and buybacks, and research additional policy tools. The report noted that "national team" funds have begun buying; late on Thursday, turnover in several broad-based ETFs widely seen as linked to official support surged, with the E Fund CSI 300 Index ETF recording a record net inflow of 18.8 billion yuan.

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2. Property Stocks Hit Limit-Up as Seven Cities Roll Out Home-Sales Reform

Source: 21st Century Business Herald

China's real estate sector was active again on October 16. By the midday break, Xincheng Holdings, Guangdong Hongyuan A, Tianjian Group and Shenzhen Property A hit their daily limit-up ceilings, with Huafa, Shirong Zhaoye, Binjiang Group, Tefa Service, 5i5j and China Merchants Shekou also gaining.

The catalyst is a further expansion of reform to the pre-sale system for commodity housing across key cities. On October 15, Shenzhen and Hangzhou issued detailed implementing rules, joining Beijing, Shanghai, Guangzhou, Wuhan and Tianjin that had already done so — bringing the total to seven key cities.

For the four tier-one cities, August 28 is the dividing line, after which newly announced land parcels prioritise finished-home sales, with pre-sale thresholds raised to completion. Beijing is the strictest, capping deposits at 1%, while Guangzhou is the most relaxed, allowing deposits up to 5%. Liu Shui, research director at the China Index Academy, said the new policy systematically restructures the commodity-housing sales system, reshaping developers' operating logic and ending the old high-turnover development model.

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3. 140th Canton Fair: Innovation Momentum and Upgrading Foreign Trade

Source: China Daily

The 140th China Import and Export Fair (Canton Fair) is highlighting new trends in foreign trade, with key figures reflecting the optimisation and upgrading of China's trade structure. A total of 32,000 companies are exhibiting, including more than 11,000 high-quality firms such as "little giants" and single-product champions.

Digitalisation is deepening, with 64% of exhibitors applying new technologies such as the industrial internet and artificial intelligence. The product mix is also upgrading: new products account for 23.2% of the exhibition and green products for 26%, both record highs. The fair plans more than 700 new-product launch events, with the number of products released up 15%.

Meanwhile, trade competition is extending from products to services, with 36.5% of exhibitors adopting a "products plus services" model. The Canton Fair reflects Chinese foreign trade moving toward higher-end, smarter and greener development.

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4. Indonesian Stocks Plunge Over 11%, Worst Drop in 28 Years, on MSCI Downgrade Plan

Source: Sohu (via JRJ)

Indonesian stocks suffered another heavy blow. Global index compiler MSCI said on Thursday that Indonesia's market has persistent governance and trading-mechanism problems and is no longer suitable for emerging-market status, launching a consultation to reclassify it as a "standalone market". As a result, after Friday's open the benchmark Jakarta Composite Index (JCI) fell as much as 8%, triggering a 30-minute trading halt; after trading resumed, the decline widened to as much as 11.4%.

Year-to-date, the index is down 38%, making it one of the worst-performing major markets globally. The currency also came under pressure, with the rupiah falling 0.5% to 18,035 per US dollar. Bloomberg data shows foreign investors have sold a net $4.9 billion of Indonesian stocks this year.

MSCI said a "standalone market" classification applies to markets that meet neither emerging-market nor frontier-market inclusion criteria; Argentina, Lebanon and Palestine are currently in that category, with no Asian market holding it. If Indonesia is reclassified, passive funds tracking MSCI emerging-market indexes may need to sell Indonesian shares. The consultation runs to April 30, 2027, with a final decision expected by June 30, 2027.

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5. Japanese and South Korean Stocks Rebound Sharply as Sentiment Recovers

Source: China.com

Japanese and South Korean stocks opened higher on October 16. South Korea's KOSPI opened up 1.8% at 5,652.65 points, with SK Hynix and Samsung Electronics both up more than 2%. A day earlier, the Korean market saw heavy selling as both major indexes triggered circuit breakers; that afternoon, Korea's financial regulator held an emergency meeting and issued a statement urging proactive measures to ensure market stability and prepare emergency plans if needed.

Japanese stocks also opened higher, with the Nikkei 225 extending gains to 1%. Overnight, all three major US indexes rose, and storage-chip and semiconductor shares rebounded from early losses, with CoreWeave up nearly 6%. Regulators and market experts attributed Korea's recent slump and rapid outflows to factors including expectations of higher global rates, uncertainty over AI semiconductor investment and earnings, and rising oil prices, saying the reaction may have been overdone.

Bank of Japan board member Junko Koeda said at a financial and economic forum in Kumamoto that, given considerable upside risks to prices and still-loose financial conditions, the BOJ should not be overly cautious in raising its policy rate — remarks that reinforced expectations for continued tightening and the normalisation of interest rates.

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6. Japanese and Korean Stocks Climb, KOSPI Up More Than 2%

Source: National Business Daily

Japanese and South Korean stocks opened higher on October 16. South Korea's KOSPI opened up 1.80% at 5,653.99 points, while the Nikkei 225 opened 0.78% higher at 64,925.29 points. Japanese stocks then extended gains, with the Nikkei 225 up as much as 1.59%. Korean shares climbed too, with the KOSPI up 2.32%, Samsung Electronics up 2.38% and SK Hynix up 1.51% (as of press time).

Overnight in the US, all three major indexes rose, with the Dow up more than 1%; storage-chip and semiconductor shares recovered from early losses, with Micron up over 1% and Qualcomm up over 3%. Separately, Japan's 10-year government bond yield fell 3.5 basis points to 2.885%.

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7. Taiwan Stock Exchange Wins Asia-Pacific Retail Access Innovation Award

Source: Euromoney

Financial publication Euromoney named the Taiwan Stock Exchange the winner of its 2026 Asia-Pacific "Retail access innovation of the year" award. The report noted that while many exchanges talk about financial inclusion, the TWSE has embedded it directly into its market structure: its approach to retail participation goes beyond investor education and digital channels, combining product innovation, infrastructure development and investor protection to create one of Asia's most accessible retail markets.

Retail investors now account for more than half of trading value in Taiwan's stock market, among the highest levels globally, underscoring the segment's importance to the market's long-term vitality. At the centre of the exchange's retail strategy is a sustained effort to lower barriers to participation.

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8. Asia-Pacific Markets Mixed; Hong Kong's Hang Seng Up 0.52%

Source: Sohu (via JRJ)

Asia-Pacific stock markets closed on October 16 with 7 of the 11 tracked indexes up and 4 down, with sentiment broadly warmer. The top gainers were South Korea's KOSPI (+2.05%), Japan's Nikkei 225 (+1.39%) and Hong Kong's Hang Seng (+0.52%); the biggest decliners were Indonesia's Jakarta Composite (−11.57%), Malaysia's FTSE index (−0.98%) and China's ChiNext (−0.39%).

In Hong Kong, the Hang Seng closed at 24,186.83 points, up 124.11 points or 0.52%; the China Enterprises Index closed at 8,128.25 points, up 24.98 points or 0.31%.

A-shares were mixed: the Shanghai Composite closed at 3,716.28 points, up 0.24%; the Shenzhen Component closed at 11,802.46 points, down 0.12%; and ChiNext closed at 2,772.38 points, down 0.39%.

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9. US September PPI Beats Estimates; Dollar and Treasury Yields Retreat

Source: Jin10 Data

Jin10 Data's October 16 global financial briefing showed US September PPI far exceeded expectations: the producer price index rose 6.3% year-on-year, a high since May 2026 and above the 5.3% expected, while the monthly reading came in at 1.3%, well above the 0.5% expected. Despite the hot inflation reading, the market is scaling back expectations for a Federal Reserve rate hike this month.

The dollar index rose then fell back, swinging around the 102 level and closing down 0.52% at 101.98; the benchmark 10-year Treasury yield fell sharply by 12.8 basis points to 5.062%; the rate-sensitive 2-year yield fell 6.4 basis points to 4.742%. Spot gold rose 1.6% to $4,169.98 an ounce, and spot silver rose 3.2% to $57.40 an ounce.

The International Energy Agency agreed to fully release the remaining 100 million barrels of crude oil it had not yet released, including 20 million barrels of diesel as soon as possible. WTI crude rose 2.18% to $96.10 a barrel, while Brent slipped 0.41% to $104.04. All three major US stock indexes rose, with the Dow up 1.08%, the S&P 500 up 0.33% and the Nasdaq Composite up 0.08%.

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10. South Korea's Market Hits 10th Circuit Breaker of the Year; Regulator Moves to Calm Markets

Source: China.com

On October 15, South Korean stocks opened down more than 8%, triggering the year's 10th circuit breaker. The KOSPI opened down over 5% and its intraday decline widened to 9%, capping a roughly 21% drop over seven consecutive sessions; the KOSDAQ fell more than 8% in tandem. Both indexes triggered circuit breakers that day, halting the whole market for 20 minutes — the 10th such halt of 2026 and the first same-day trigger since July 29.

Samsung Electronics and SK Hynix both fell more than 11% that day, with the latter hitting a low since April; foreign investors sold a net 2.9 trillion won, a clear sign of the selloff.

The Financial Services Commission then issued an emergency statement, requiring proactive measures to ensure market stability and protect investors and to launch emergency plans if necessary; authorities will crack down hard on false rumours, market manipulation and illegal short-selling. Chairman Lee Eog-won urged financial institutions to avoid indiscriminate lending and to strengthen customer protection and risk management.

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