APAC Market Wrap - 29 Aug
China Stock Market: A-shares closed out August today, with the market showing a unilateral upward trend this month. All three major indices posted significant monthly gains, with the ChiNext Index up over 24%, the Shanghai Composite Index surpassing 3,800 points to hit a 10-year high, and the STAR 50 Index rising 28%.
By sector, market hotspots this month centered on computing power and chips, with stocks like New Founder hitting historic highs and Industrial Rich’s total market cap exceeding ¥1 trillion.
Hong Kong Stock Market: The major Hong Kong indices continued their upward trend this month. By the close, the Hang Seng Index rose 1.23% to 25,077.62 points, the Tech Index gained 4.06% to 5,674.31 points, and the State-Owned Enterprises Index increased 0.73% to 8,947.79 points.
Market performance saw cryptocurrencies, pharmaceuticals, gold, and lithium battery stocks leading gains, while film and shipping stocks lagged.
Japan Stock Market: The Nikkei 225 fell 0.26% for the third day, dropping 110.32 yen to close at 42,718.47 yen.
By industry, five sectors—non-ferrous metals, pulp and paper, and wholesale—rose, while 28 sectors, including real estate, insurance, transportation equipment, and retail, declined.
South Korea Stock Market: The KOSPI dropped 0.32% to 3,186.01 points.
Sectors like air freight, auto parts, and healthcare management led gains, while stationery, electrical products, and sales sectors saw the largest declines.
Australia Stock Market: The S&P/ASX 200 (XJO) fell 0.08% to close at 8,973.100 points.
Sectors such as aerospace, auto parts, and credit rose, while education, medical equipment, waste management, and transportation saw slight declines.
Singapore Stock Market: The Straits Times Index rose 0.37% to close at 4,269.70 points.
Sectors like credit, waste management, and oil and gas saw modest gains, while forestry products, travel and leisure, and diversified media posted larger declines.
Malaysia Stock Market: The Malaysia Index fell 0.75% to close at 1,575.12 points. The commercial trust sector saw a slight rise, while utilities, communications and media, and construction sectors collectively declined.
Key Events
Thailand Constitutional Court Removes PM Paetongtarn for Ethics Violation
The Thai Constitutional Court ousted Prime Minister Paetongtarn Shinawatra, citing a breach of ethical standards based on a leaked phone conversation with a former Cambodian leader.
Denmark Slashes 2025 Growth Forecast Due to Novo Nordisk Slowdown and U.S. Tariffs
The Danish government on Friday lowered its 2025 growth forecast from 3% to 1.4%, largely due to a slowdown in sales by pharmaceutical giant Novo Nordisk. Denmark’s recent growth, which reached 3.7% last year, has been driven by pharmaceutical exports, including Novo Nordisk’s popular weight-loss drugs Ozempic and Wegovy.
The Ministry of Economic Affairs noted that after a surge in exports to the U.S. by late 2024, shipments dropped sharply in early 2025 due to inventory buildup and increased competition in the weight-loss drug market, eroding Novo Nordisk’s market share. Generic competition is also squeezing U.S. sales opportunities.
Thailand Sovereign Fund Bets on Gold, Commodities, and Global Stock Rebound After Weak H1
Songpol Chevapanyaroj, Secretary-General of Thailand’s Government Pension Fund (GPF), believes that U.S. trade tariffs and heightened geopolitical tensions will boost demand for safe-haven assets. With U.S. trade policies clarifying and global interest rates trending downward, market uncertainty is expected to decrease, creating favorable conditions for equity assets.
After a dismal first-half performance, the GPF, managing $45 billion, is shifting focus to gold, commodities, and global stocks to drive a recovery in returns and meet its annual performance targets.
South Korea Proposes $525B 2026 Budget with Big R&D and AI Boost
The South Korean government on Friday proposed a 2026 budget of 728 trillion won (approximately $525 billion), aiming to significantly increase spending on R&D and artificial intelligence (AI) to fuel future growth.
The Ministry of Economy and Finance stated that the cabinet-approved 2026 budget reflects an 8.1% increase, or 54.7 trillion won, over this year’s budget, a faster rise compared to the 3.2% year-on-year increase in 2025 and 2.8% the previous year.
Institutional Views
Citi: Overweight U.S. and Europe Stocks, Bearish on Dollar
Dirk Willer, Citi’s global macro and asset allocation research head, recommends overweighting stocks, particularly in the U.S. and to some extent Europe, while underweighting UK stocks. He argues that “American exceptionalism” has returned, with the tech sector leading the U.S. market amid a significant capital expenditure boom that he believes is ongoing, leaving room for further stock gains.
Europe’s business cycle is showing signs of turning, and if European investors repatriate funds, it could lift European equities. Citi’s London strategists recently upgraded their rating on Chinese stocks.
JPMorgan: Raises S&P 500 Target, Sees Global Stock Opportunities
Julia Wang, a strategist at JPMorgan Private Bank, says global equities remain a viable opportunity, raising year-end and 12-month S&P 500 targets, supported by strong earnings and improved valuations as macro tail risks decline.
She continues to favor global diversification, preferring large-cap over small-cap stocks, and highlights sectors benefiting from long-term growth trends and robust profits, with tech and finance as preferred sectors. The base case targets are 6,350-6,450 points by year-end and 6,650-6,750 points over the next 12 months.
UBS: Global Stock Rally May Persist, Earnings Support Valuations
Mark Haefele of UBS Group predicts the global stock rally could continue, citing an expected soft economic landing, solid corporate earnings, and lower interest rates over the next 12 months. He notes that earnings continue to exceed expectations, justifying high stock valuations, and argues the market is not in a bubble.