APAC Market Wrap - 22 Jul
China: Markets oscillated upward all day, with the three major indices hitting new yearly highs intraday. By close, the Shanghai Composite rose 0.62%, the Shenzhen Component gained 0.84%, and the ChiNext Index climbed 0.61%.
Sector-wise, super hydropower, engineering machinery, coal, and cement led gains, while Zhipu AI, components, software development, and gaming sectors saw declines.
Hong Kong: All three major indices rose, with the Hang Seng Index up 0.54%, the Hang Seng Tech Index up 0.38%, and the State-Owned Enterprises Index up 0.39%.
Sector performance was mixed for tech stocks, while coal stocks strengthened, lithium battery and heavy infrastructure stocks broadly rose, and non-ferrous metals and auto stocks also gained.
Japan Stock Market: The Nikkei continued to decline, down 0.11% to 39,774.92 yen, a drop of 44.19 yen from the previous day (trading volume around 1.68 billion shares).
Sector-wise, 15 industries including steel, machinery, and non-ferrous metals rose, while 17 industries like pharmaceuticals, precision instruments, and other products fell.
South Korea Stock Market: The KOSPI index edged down 40.87 points, a 1.27% decline. By sector, paper and timber, health management companies, and office electronics rose, while machinery, trading companies, and electrical equipment sectors declined.
Australia Stock Market: The S&P/ASX 200 (XJO) rose 0.1% to 8,677.20 points. Sectors like agriculture, heavy machinery, biotechnology, and metals & mining saw modest gains, while semiconductors, forestry products, and banking posted larger declines.
Singapore Stock Market: The Straits Times Index rose 0.03% to 4,208.26 points. Industrial distribution, waste management, and non-alcoholic beverages saw slight gains, while industrial products, medical devices & equipment, and agriculture & heavy machinery recorded larger drops.
Malaysia Stock Market: The FBM KLCI fell 0.34% to 1,519.40 points. Transport & logistics, business trusts, and consumer goods & services saw modest gains, while industrial products & services, construction, and utilities declined.
Key Events
Indonesia Adopts New AI Roadmap to Attract Foreign Investment
An official stated that Indonesia will finalize its first national AI strategy next month to draw foreign investment. As Southeast Asia’s largest economy, Indonesia aims to join the global competition in AI and chip manufacturing.
Previously, neighbor Malaysia has been working to become a regional AI hub, attracting billions from global tech firms investing in critical infrastructure for growing cloud and AI service demands.
Indonesia’s Communications and Digital Ministry Deputy Minister Nezar Patria told Reuters on Monday that this AI roadmap will be the country’s first comprehensive AI document. As the world’s fourth most populous nation, Indonesia previously issued only a smaller ethics guideline in 2023.
Malaysia Welcomes 16.9 Million Foreign Tourists in First Five Months, Up 20%
Malaysia’s Tourism Ministry reported that from January to May this year, the country hosted 16.9 million international tourists, a 20% increase from the same period in 2024.
In a written reply to parliament, the ministry noted that nearly half of these visitors, about 8.34 million, came from neighbor Singapore, followed by 1.82 million from Indonesia, 1.81 million from China, and 1.06 million from Thailand.
Compared to 2024, tourist numbers from “long-haul” markets like Australia and the UK also rose by 16.6% and 8.7%, respectively.
South Korea and U.S. to Hold Tariff Talks on July 25
South Korea’s Finance Minister Koo Yoon-cheol announced Tuesday that South Korea and the U.S. will meet on July 25 to discuss tariffs. Koo and Trade Minister Yeo Han-koo will confer with U.S. Treasury Secretary Besant and U.S. Trade Representative Greer.
The foreign and industry ministers may travel to the U.S. as early as this week for talks with U.S. officials.
Institutional Views
Deutsche Bank: Powell’s Removal Could Spike 30-Year Treasury Yields by 50 bps
Deutsche Bank strategists suggest that if U.S. President Donald Trump removes Fed Chair Jerome Powell, 30-year U.S. Treasury yields could jump over 50 basis points.
Nomura: USD/JPY Weakness Likely Post-Japan Senate Election
Nomura’s global forex strategy team of three noted in a report that the likelihood of USD/JPY weakening is rising after Japan’s Senate election, citing multiple factors.
Despite potential expansive fiscal policies, funding may come from 2024 fiscal year tax surpluses rather than new debt, which could ease yen selling pressure.
Rabobank: Yen May Strengthen on Rate Hike Prospects
Rabobank forex strategist Jane Foley said in a report that the yen could strengthen if the Bank of Japan hints at another rate hike by year-end.
She noted the BOJ may hold policy steady at its July 31 meeting due to trade negotiation and political uncertainties following the coalition’s Senate election loss.