APAC Market Wrap - 25 Jun

China: At the close, the Shanghai Composite rose 1.03%, the Shenzhen Component gained 1.72%, and the ChiNext Index surged 3.11%. Markets rallied throughout the day, with the Shanghai Index hitting a yearly high and the ChiNext jumping over 3%. Total trading volume across Shanghai and Shenzhen reached 1.6 trillion RMB, up 188.2 billion RMB from the previous session.  

 

Market focus centered on financials and defense, with more stocks rising than falling—over 3,900 stocks advanced. Sectors like defense, securities, internet finance, and insurance led gains, while oil and gas, pesticides, media, and ports lagged.  

 

Hong Kong: Hong Kong’s three major indexes all strengthened. The Hang Seng Index rose 1.23% to 24,474.67, the Tech Index gained 1.15% to 5,359.02, and the H-share Index increased 1.13% to 8,859.29. The Hang Seng Index continued its upward trend, nearing its prior high of 24,874.39, marking a fourth consecutive day of gains.  

 

Securities, cryptocurrencies, semiconductors, real estate, and insurance stocks performed strongly, while oil and gas equipment and shipping stocks weakened.  

 

Japan: The Nikkei 225 continued its climb, closing up 151.51 yen at 38,942.07 (with a trading volume of about 1.58 billion shares).  

 

By sector, 13 industries advanced, including other products, electronics, chemicals, and metal products, while 20 industries, such as utilities, precision equipment, pulp and paper, and retail, declined. The U.S. market’s semiconductor rally, driven by easing Middle East tensions, carried over to Tokyo.  

 

South Korea: The KOSPI index edged up 0.15% to 3,108.25. Sales firms, utilities, and autos saw slight gains, while defense, IT services, machinery, and software dipped.  

 

Singapore: The Straits Times Index rose 0.57%, up 22.34 points to 3,926.64. Furniture, apparel, securities, and retail sectors gained, while energy, pharmaceuticals, forestry, and medical equipment fell.  

Key Events

“Upgrade” Fails Again! MSCI Keeps South Korea in Emerging Markets  

South Korea’s bid for developed market status faced another setback this week as MSCI’s annual classification review on Tuesday retained the country in the “emerging markets” category, citing limited forex reforms and restricted access to investment instruments.  

 

MSCI’s June 24 statement said it “will continue monitoring the implementation and market acceptance of measures to enhance South Korea’s stock market accessibility.”  

Defying Tariff Risks? Japan’s Hawkish BOJ Official Calls for Decisive Rate Hikes  

On Wednesday, a hawkish Bank of Japan (BOJ) board member urged “decisive” rate hikes to address inflation risks despite uncertainties from U.S. tariffs, highlighting the BOJ’s focus on rising price pressures.  

 

BOJ board member Naoki Tamura said Japan’s underlying inflation was already moving toward the BOJ’s 2% target before Trump’s April announcement of reciprocal tariffs, and the pace was slightly faster than expected.  

Thailand’s Central Bank Pauses Rate Cuts Amid Domestic Politics and Global Uncertainty  

On Wednesday, the Bank of Thailand kept rates unchanged, pausing cuts amid renewed domestic political tensions and global uncertainties.  

 

The Monetary Policy Committee voted 6-1 to hold the policy rate at 1.75% after two consecutive cuts, with one member favoring a cut.  ANZ economist Krystal Tan noted in a recent report, “Thailand’s macroeconomic conditions suggested a dovish stance even before the latest political instability.”  

Australia’s Monthly Inflation Cools, Bolstering Case for July Rate Cut  

Australia’s May monthly inflation rate slowed faster than expected to 2.1%, near the bottom of the Reserve Bank of Australia’s 2-3% target range, strengthening the case for further rate cuts.  

The Australian Bureau of Statistics reported a 2.1% CPI rise, below economists’ 2.3% forecast, with inflation staying within the target range for 10 consecutive months.  

Institutional Views  

Goldman Sachs: China’s Economic Growth Remains Resilient, Maintains Overweight on Chinese Stocks  

“We maintain an overweight recommendation on A-shares and Hong Kong stocks, targeting 4,600 for the CSI 300 and 84 for MSCI China, implying about 10% upside,” said Goldman Sachs China equity strategist Si Fu at a June 23 media briefing.  

 

For sector allocations, Fu noted Goldman recently upgraded banks and real estate due to domestic policy support while remaining overweight on consumer-driven sectors like medical devices, consumer services, media, and e-commerce retail.  

Bank of America: Investor Interest in Japanese Stocks Rises as U.S. Valuations Soar  

Bank of America analysts said rising U.S. stock valuations are pushing investors to diversify, with growing interest in Japanese stocks. BofA noted that high U.S. valuations are a key driver for global investors seeking diversification beyond U.S. markets.  

BlackRock: More “DeepSeek Moments” Expected in China’s Tech Sector  

BlackRock anticipates more “DeepSeek moments” in China’s biotech, automation, and autonomous driving sectors, reflecting optimism about further AI development in China. BlackRock’s Greater China investment strategist Thomas Lu said at a Tuesday briefing that while timing is uncertain, the current environment is ripe for tech firms to achieve robust innovation.