Asia Pacific indices mixed

David Morrison

SENIOR MARKET ANALYST

03 Oct 2025

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Asian Pacific stock indices had a mixed session on Friday, while South Korean and mainland Chinese equities were closed for official holidays. The Japanese Nikkei staged a standout performance, ending the session up 1.9%.

The index got a boost from Hitachi, which soared 9% after the conglomerate announced a partnership with OpenAI to build global AI infrastructure and data centres. This follows the sharp gains seen yesterday from Korea’s Samsung Electronics and SK Hynix after they entered agreements to supply their memory chips to OpenAI.

The Nikkei’s rally came as Japan’s Unemployment Rate rose to 2.6% in August, above expectations as well as the prior month’s 2.3% reading. Bank of Japan (BOJ) governor Kazuo Ueda spoke overnight. He dampened expectations for a rate hike at the next monetary policy meeting at the end of this month.

Mr Ueda cited growing global uncertainties, such as a deterioration in the US labour market, as well as the Trump administration's tariffs, which could dissuade Japanese companies from raising wages.

Meanwhile, the S&P Global Japan Services PMI ticked up to 53.3 from 53.1, underpinned by robust domestic demand even as new export business fell. But S&P Global noted that private sector growth slowed to its weakest since May as manufacturing output contracted more sharply than services.

Australia’s ASX 200 added 0.5% overnight, while Hong Kong’s Hang Seng fell 0.5% weighed down by a retreat across the tech sector. Hang Seng Tech Index slipped 1.21%. Mainland Chinese markets remained closed for a holiday.

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US stock indices grind higher

US stock indices were firmer across the board on Thursday. The Dow, S&P 500 and NASDAQ gained 0.2%, 0.1% and 0.4% respectively, with all three posting fresh closing highs. The small cap Russell 2000 outperformed, adding 0.7%, taking it back within sight of its own all-time high hit last week.

Source: TN Trader

Investors brushed aside concerns about the ongoing government shutdown, which has just entered its third day. Investors and traders alike also cast aside recent concerns over the possibility of poor returns on investment in artificial intelligence (AI). NVIDIA tacked on 0.9% to hit a fresh all-time high, taking the market capitalisation of the world’s most valuable company to $4.6 trillion.

Other chipmakers, including Intel and AMD, were also in demand, and the rally has continued this morning. Intel was up 1.6% in early trade on Friday, while the Taiwan Semiconductor Manufacturing Company jumped 2.3% to trade at a fresh all-time high.

Stock index futures were firmer across the board this morning, adding to yesterday’s record-breaking gains. It’s as if traders are relieved that the US government shutdown means that today’s scheduled Non-Farm Payroll release will no longer go ahead.

While this deprives the Federal Reserve of a key data point ahead of its October policy meeting, it also removes a potential downside catalyst for equities. The last two updates, for July and August, were dismal, with both coming in well below expectations, and as previous releases were revised down sharply.

President Trump reacted to July’s numbers by sacking the head of the Bureau of Labor Statistics, Erika McEntarfer. The Trump administration has just withdrawn its preferred candidate, EJ Antoni, due to mounting controversy and bipartisan criticism.

On Wednesday, the monthly ADP private payroll update came in well below expectations, confirming weakness across the labour market that had already been picked up by the last two Non-Farm Payroll releases. Investors saw this as increasing the likelihood that the US Federal Reserve will cut interest rates ahead of year-end.

The probabilities rose again yesterday with the CME’s FedWatch tool indicating a 98% probability of a 25-basis point cut at the end of this month, up from 88% last week, and an 88% probability of another 25 basis points in December, up from 65%. These numbers would suggest that investors aren’t factoring in the possibility that the loss of data could persuade the Fed to leave rates unchanged, given the lack of economic clarity.

The government shutdown, triggered by the failure of Congress to reach a funding deal, has already resulted in the furlough of around 750,000 federal workers, according to the Congressional Budget Office. 

President Trump has warned of mass layoffs and described the standoff as an “opportunity” to cut federal agencies, while Democrats refuse to back down on extending health care tax credits for millions of American citizens. Meanwhile, Treasury Secretary Scott Bessent cautioned that the shutdown could deliver “a hit to GDP, a hit to growth and a hit to working America.”

Europe opens higher

European stock indices were firmer across the board this morning. These moves took the Euro Stoxx 50, French CAC and the UK’s FTSE 100 to fresh all-time highs. Futures on the German DAX were also trading within easy reach of their own all-time highs, while German bourses were closed in observance of German Unity Day. The tech sector has been a major contributor to recent gains. The Stoxx Europe 600 Technology was up around 5% for the week so far, helped along by news of OpenAI’s $500 billion private market valuation.

Source: TN Trader

This morning brought the release of a clutch of Final Services PMIs from across the region. The Services sector has been holding up better than Manufacturing of late, but that’s not saying very much. Yet most held up well, and, apart from France, continue to show expansion. The UK’s Final Services PMI came in at 50.8, below the prior reading of 51.9, which was also the consensus forecast.

US dollar steadies

There was relatively little movement across Forex this morning. The Dollar Index was effectively unchanged as it consolidated after yesterday’s bounce. On Wednesday, the Index came within a few cents of 97.00, having pushed above 98.00 this time last week. It was trading around 97.50 this morning and continues to hold in a tight range, with resistance around 98.00 and support at 97.00.

This should be quite encouraging for dollar bulls (assuming there are any), given the US government shutdown, and the increasing likelihood of 50 basis points-worth of rate cuts from the Fed before year-end.

Meanwhile, the Japanese yen lost ground overnight, slipping against the US dollar and commodity-linked currencies. The move came as Bank of Japan (BOJ) governor Kazuo Ueda played down the prospect of a rate hike at the BOJ’s next meeting at the end of this month.

Mr Ueda cited uncertainty over the global economy as well as US tariffs. Despite this, the yen continues to trade in a range, with the USDJPY currently smack bang in the middle of support around 146.50 and resistance near 148.50.

Source: TN Trader

Precious metals hover near records

Gold has now had two attempts to break above $3,900 this week and has failed both times. Despite this, on both occasions, gold managed to post fresh all-time highs, hitting $3,895 on Wednesday and $3,897 yesterday. It feels as if it’s just a matter of time before it gets there.

Source: TN Trader

Although, as has been noted repeatedly over the past month or so, the daily MACD continues to indicate that the market is overbought. This week has seen some evidence that traders are aware of this.

There was a sharp selloff on Tuesday and again yesterday as gold pushed up to fresh record highs. This suggests that traders are getting a bit cautious with prices at current levels.

Having said that, both selloffs steadied after a few hours, allowing traders to buy in at cheaper levels. Of course, that’s a strategy that has worked rather well in the stock market. But it can be extremely dangerous in commodity markets, which have very different drivers.

Yet again, silver mirrored gold’s moves and experienced similar selloffs this week in terms of timing, although the moves were more violent. Yesterday afternoon, silver briefly broke above $48 an ounce before sellers flooded in to drive the price back down below $46.

This $2 drop (over 4%) happened in little more than an hour. Since then, silver has managed to make back a decent proportion of those losses. But traders should expect to see more of these volatile moves as the MACD continues to push higher into overbought territory.

Source: TN Trader

Oil slides to four-month low

Crude prices managed to steady this morning following Thursday’s selloff. Yesterday afternoon, front-month WTI broke below intermediate support around $61.50 and proceeded to drop towards $60, hitting a four-month low. The area around $60 acted as support throughout the second half of May this year.

While it hasn’t been seriously retested, it’s possible that traders will look to buy back short positions given that oil has lost over 7% so far this week. The downward move showed that sentiment has been driven by the prospect of fresh supply hitting a market where demand growth continues to slow.

Source: TN Trader

The reopening of an Iraqi/Kurdish pipeline through Turkey, allowing oil to flow for the first time since March 2023, is one issue. Another is the expectation that OPEC+ will announce a large increase in production by its members at its meeting this Sunday.

Meanwhile, US crude inventories have come in above expectations, while China appears to be stockpiling crude imports rather than using them. Global demand growth is uncertain, given the increased use of alternatives, and as global economic growth remains fairly anaemic.

Sentiment turned swiftly as prices jumped last week on concerns that Ukraine’s attacks on Russia’s energy infrastructure could crimp global supplies.

Gas extends upside run

Natural gas prices extended their upward move, adding to recent gains. The latest advance comes after a sharp bull run over the past fortnight, with buyers remaining firmly in control. The upward momentum suggests that demand dynamics have provided a supportive base, giving gas a clear edge compared with other energy contracts.

Despite recent volatility seen in other commodities, gas has managed to push higher at a relatively steady pace. The continued advance reflects a market that appears comfortable sustaining its recent gains, even as other sectors struggle for direction.

Crypto pulls back after BTC surge

Yesterday, Bitcoin pushed above $121,000 to hit its best level since mid-August. It has pulled back a touch this morning, which is to be expected given the 10% rally since the weekend. The muted pullback highlighted the market’s tendency to cool after sharp moves, though sentiment remains broadly positive following the earlier spike. Ether was little changed this morning and is currently pushing against resistance around $4,475.

Volatility steady

The VIX pulled back a touch as equity markets pushed to fresh records. The lack of movement suggests investors remain broadly comfortable with the current backdrop, despite the ongoing government shutdown and broader macroeconomic uncertainties.

The muted reading points to a market still willing to embrace risk and avoid defensive positioning. While headline risks remain in play, the steady tone of the VIX indicates traders are not rushing to hedge against the potential downside risk.

Market outlook

Momentum continues to favour the bulls, with US and European equities alike pushing into record territory. The government shutdown, while headline-grabbing, has so far been ignored by investors, and even the economic data blackout is being framed as supportive for risk assets. AI enthusiasm remains the engine of the rally, but valuations and memories of the dot-com crash act as undercurrents of caution.

For now, US futures point higher, Europe is joining the rally, and euphoria is evident across asset classes. The key question is how long this momentum can last?


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