APAC Market Wrap - Nov 28

Mainland China stock market: Monthly summary: The Shanghai Composite fell 1.67% in November. After renewing a 10-year intra-month high, it retreated amid oscillation, ending a six-month winning streak.

The ChiNext Index fell 4.23% for the month. Both the ChiNext and Shenzhen Component displayed an overall pattern of “early weakness followed by late recovery”. Driven by computing-power hardware concepts in late November, they gradually repaired part of the earlier declines.

Sector-wise, hot-spot rotation accelerated this month, with the primary focus concentrated on the battery industry chain, Hainan, Fujian, computing hardware, and related themes.

Hong Kong stock market: All three major indices rose this week. At Friday’s close:

Hang Seng Index +2.53% weekly to 25,858.89 points
Hang Seng Tech Index +3.77% weekly to 5,599.11 points
H-Shares Index +2.36% weekly to 9,130.18 points

From market performance, gold-related stocks and robotics names performed strongly, while pharmaceutical and real estate stocks weakened.

Japanese stock market: The Nikkei 225 rose 0.17% to 50,253.91 points.

By sector, steel, machinery, and financial services edged higher; air transport, land transport, retail, and non-ferrous metals declined.

Korean stock market: The KOSPI fell 1.51% to 3,926.59 points. Healthcare, bioengineering, venture capital, and related sectors rose, while electrical products, semiconductors, electrical equipment, and media sectors declined.

Australian stock market: The S&P/ASX 200 fell 0.04% to 8,614.100 points. Industrials, semiconductors, steel, and building materials rose, while apparel, automobiles, and banks declined.

Singapore stock market:The FTSE Singapore Straits Times Index (STI) rose 0.32% to 4,523.96 points. Forestry products, industrial distribution, and education sectors rose, while oil & gas, personalized services, and diversified media declined.

Malaysian stock market:The FTSE Malaysia KLCI fell 0.80% to 1,604.47 points. Closed-end funds, business trusts, and real estate rose, while utilities, telecommunications & media, and transportation & logistics edged lower.

Key Events

South Korea to invest 280 billion KRW in next-generation battery technology

On Friday, South Korea’s Ministry of Trade, Industry and Energy announced that the government will invest 280 billion KRW over the next four years to develop next-generation battery technologies such as all-solid-state batteries, lithium-metal batteries, and lithium-sulfur batteries. This will help Korean companies enhance competitiveness amid intensifying global rivalry.

On the same day, Prime Minister Kim Min-seok chaired a meeting of the National Advanced Industry Committee and unveiled the investment plan, aimed at securing Korea’s global leadership in the rechargeable battery industry.

The ministry stated that the plan is designed to boost the competitiveness of the rechargeable battery sector, which plays a critical role in achieving carbon neutrality and future mobility but is facing significant challenges.

CME halts derivatives trading due to technical failure – may trigger market volatility

A CME spokesperson in Singapore said on Friday that the Chicago Mercantile Exchange has suspended futures and options trading due to a technical issue at its data center. The spokesperson stated via email: “Due to a cooling problem at the CyrusOne data center, our markets are currently halted. Support teams are working to resolve the issue as quickly as possible and will notify clients as soon as pre-opening details are confirmed.”

Contracts including U.S. crude oil, gasoline, and Malaysian palm oil traded via CME’s electronic platform were affected during Friday’s Asian morning session following the U.S. Thanksgiving holiday. Traders said U.S. Treasury and S&P 500 futures were also impacted. Other platforms, including the EBS FX platform, were affected by the suspension.

Charu Chanana, Chief Investment Strategist at Saxo Bank in Singapore, said: “Liquidity was already thin, so even a brief halt can distort price discovery in Treasuries, FX, and commodities. The main risk is a round of catch-up volatility.”

Wall Street unanimously bullish on emerging markets: another strong year expected in 2026

Major Wall Street banks are gearing up for another robust year in emerging markets. They expect continued dollar weakness and the AI investment boom to further propel this asset class.

These favorable factors are expected to drive further EM growth. Local-currency bonds have already delivered 7% returns this year – the best since 2020 – while currency indices rose more than 6%. Morgan Stanley strategists said that as the U.S. economy slows and the Fed likely cuts further, the rally should persist.

The bank recommends clients maintain long positions in local-currency emerging-market bonds, forecasting returns of around 8% by mid-2026. For USD-denominated EM bonds, it expects “high single-digit” gains over the next 12 months.

Institutional Views

JPMorgan: Bullish on Chinese stocks, upgrades A-shares to Overweight

JPMorgan strategists said the probability of sizable gains in Chinese stocks next year far exceeds the risk of a major drop, as “multiple incremental drivers are turning positive.”

They noted that next year will bring several supportive factors, such as broader AI adoption and consumer stimulus measures, prompting the upgrade of A-shares to Overweight.

Saxo Group: Markets likely sideways or slightly higher into year-end

Asian shares rose on Thursday as Fed rate-cut expectations warmed. Charu Chanana, Chief Investment Strategist at Saxo Group, said markets responded positively to renewed Fed cut hopes, helping cool recent AI bubble concerns.

Heading into year-end, markets may trade sideways or edge higher; Fed cut expectations and strong seasonality make December hard to short, and a “Santa Claus rally” remains very much on the table.

ANZ: Copper continues to be supported by risk-on sentiment and tight supply

ANZ analysts said copper prices remain supported by risk appetite, as traders bet on a December Fed cut, while the metal also benefits from tight supply. Codelco is pushing to raise its 2026 annual premium (versus LME) to $350 per tonne – far above this year’s $89.

Commonwealth Bank of Australia: Russia-Ukraine ceasefire could quickly send Brent to $60

Market expectations of a ceasefire may pave the way for the West to lift sanctions on Russian supply. “Any ceasefire agreement would reduce supply risk from U.S. sanctions on Rosneft and Lukoil,”

CBA analyst Vivek Dhar wrote. Those sanctions, effective November 21, have already impacted Russian oil and product exports. He added that Brent should fall relatively quickly to $60 once a deal is reached, while Russian refinery activity would also normalize as Ukrainian drone attacks cease.

ABN AMRO: UK budget makes December BoE cut more likely

ABN AMRO analyst Bill Diviney wrote that the Bank of England is now more likely to cut in December, as Wednesday’s UK budget measures should lower inflation.

Fuel-duty freeze and falling household energy bills could drag inflation down. ABN AMRO expects the BoE to lower rates to 3.75% next month unless November inflation surprises sharply higher (data due one day before the December 18 decision).

Pantheon Macroeconomics: Bank of Korea likely to stay on hold longer than previously expected

Facing a weak KRW and soaring Seoul property prices that raise financial-stability risks, the BOK held its key rate at 2.50%.

Pantheon senior economist Kelvin Lam said: “We originally expected a delay to January, but based on new signals in the statement, we now think the hold period may be longer than previously anticipated. A weak won and FX volatility are hardly a good backdrop for easing.”