APAC Market Wrap - Jan 21

China Stock Market: At close, Shanghai Composite +0.08%, Shenzhen Component +0.7%, ChiNext Index +0.54%.  

 

Precious metals led all day, oil & gas active. Big consumer stocks weakened across the board, led by baijiu; banks drifted lower.

 

Hong Kong Stock Market: Hong Kong’s major indices rebounded today. At close: Hang Seng Index +0.37% to 26,585.06, Hang Seng Tech Index +1.11% to 5,746.30, H-share Index +0.31% to 9,122.95.  

 

Semiconductors, gold, optical communications, consumer electronics, and robotics outperformed; sportswear and real estate led losses.

 

Japan Stock Market: Nikkei Index −0.41% to 52,774.64.  

 

Non-ferrous metals, oil, and power gained; banks, insurance, and securities declined.

 

Korea Stock Market: KOSPI +0.49% to 4,909.93.Autos, auto parts, and internet gained; biotech engineering, life sciences, and shipping declined.

 

Australia Stock Market: S&P/ASX 200 −0.37% to 8,782.90.  

 

Metals and agriculture gained; aerospace, semiconductors, and diversified financials declined.

 

Singapore Stock Market:Straits Times Index (STI) −0.38% to 4,809.88.

 

Industrial products, non-alcoholic beverages, and medical services gained; utilities, forestry products, and retail declined.

 

Malaysia Stock Market: FTSE Malaysia KLSE Index +0.40% to 1,705.81.  

 

Tech, industrial products, and real estate gained; construction, closed-end funds, and plantations declined.

Key Events  

U.S. Uranium Group to Acquire Australian Miner, Building “Mine-to-Metal” Rare Earth Chain  

 

U.S. uranium producer Energy Fuels announced it will acquire Australian Strategic Materials Limited (ASM) to create a “mine-to-metal” industry champion.  

 

In a Tuesday (Jan 20) press release, Energy Fuels said it signed a Scheme Implementation Deed to acquire 100% of ASM’s issued shares at a valuation of $299 million. A conference call will follow later today.  

 

The deal remains subject to shareholder and regulatory approvals. ASM shares on the ASX surged 119.31% on the news, hitting the highest level since October last year. Energy Fuels U.S. shares rose ~2.4% pre-market.

 

Korean Stocks Hit Record Close; President Lee Jae-myung Still Says Market Is Undervalued  

 

Korean President Lee Jae-myung said Wednesday (Jan 21) that Korean stocks remain undervalued.  

 

Last year, Korea’s market was one of the world’s best performers with a 76% gain, and the KOSPI posted its strongest year since 1999.  

 

This year, large Korean companies have been chased on optimistic AI prospects, with chipmakers and automakers driving gains. The KOSPI has risen 15% this month. On Wednesday, it fluctuated near 4,880 before closing up 0.5% at 4,909.93 — a record close.  

 

Still, Lee believes Korean stocks suffer from the “Korea Discount,” keeping valuations low.

 

Crypto Rebound Over? Bitcoin Breaks Below $90,000 on Risk-Off Sentiment  

 

Global investor appetite for risk assets has quickly cooled, sending Bitcoin below $90,000 and ending its year-to-date uptrend.  

 

Recent risk-off flows are tied to President Trump’s threat to annex Greenland, with ongoing geopolitical tension forcing investors to reduce exposure to risk assets. Global stocks, crypto, U.S. Treasuries, and Japanese bonds fell in tandem, highlighting elevated market concern.  

 

Bitcoin trades around $89,000 as of press time, down over 6% in the past seven days. Ethereum, the second-largest by market cap, fell more than 11% over the same period; other tokens like BNB, XRP, and Solana also posted sharp declines.  

 

Flowdesk OTC trader Karim Dandashy noted: “$90,000 has been a key level for Bitcoin since early this year, acting as support. A break below could mark an important short-term turning point.”

Institutional Views  

Bank of America: Global Investor Sentiment Soars, Long Gold Is the Most Crowded Trade  

 

Bank of America’s January survey showed global fund managers’ optimism at the highest since July 2021, with surging growth expectations and cash holdings falling to a record low of 3.2%.  

 

The survey (Jan 8–15) covered 96 investors managing $575 billion. BofA’s Bull/Bear indicator jumped to +9.4 (“extremely bullish”), signaling the lowest equity risk hedge level since Jan 2018.  

 

Net 38% of respondents expect stronger growth, recession fears hit a two-year low, and “no landing” became the base case. Liquidity conditions are the best since 2021, with nearly half of respondents saying they have no hedges against a sharp stock drop. Geopolitical risk overtook AI bubble as the top tail risk, while long gold positions became the most crowded trade.

 

Goldman Sachs: Emerging Market Stocks Are the Best Wealth & Investment Destination for the Next Year and Five Years  

 

Goldman Sachs Wealth Management predicts emerging market equities will be the world’s best wealth and investment destination over the next year and five years, with the highest expected base return of 8%. They assign a 20% probability of outperformance and 25% chance of low-to-mid single-digit negative returns.  

 

“Of all markets, we see the widest range of outcomes for emerging market base expected returns.”

 

State Street Tokyo: “Takaichi Trade” Remains Valid; Shorting Yen Is the Simplest Strategy  

 

State Street Investment Management senior fixed income strategist Masahiko Loo said: “The ‘Takaichi trade’ remains very effective. The simplest strategy is to short the yen, short Japanese government bonds or steepen the yield curve, and go long the Nikkei.”  

 

“Japan’s market has severe herd behavior. That’s why no banks are buying. Why not? They’re waiting for the Bank of Japan to hike.”  

 

“No one wants to catch a falling knife. The knife’s fall causes short-term volatility.”