APAC Market Wrap - Feb 2
Chinese Stock Markets:
At close, the Shanghai Composite Index rose 0.85%, the Shenzhen Component Index gained 0.21%, and the ChiNext Index fell 0.4%. Sector highlights: coal concepts triggered a wave of limit-up moves, airport & aviation strengthened, real estate was active, hydrogen energy concepts surged quickly, while AI applications, precious metals, and compute hardware led declines.
Hong Kong Stock Market:
Hong Kong's major indices all pulled back. The Hang Seng Index fell 2.23% to 26,775.57; the Hang Seng Tech Index dropped 3.36% to 5,526.31; and the Hang Seng China Enterprises Index declined 2.54% to 9,080.19.
Market action showed coal, real estate, aviation, and pharma stocks bucking the trend, while SaaS, optical communications, and AI application growth names broadly under pressure — sentiment weighed by mixed domestic and external factors.
Japanese Stock Market:
The Nikkei 225 fell 0.78% to 54,293.36. By sector, non-ferrous metals, mining, and petroleum advanced; other products, services, and information & communications declined.
South Korean Stock Market:
The KOSPI Composite Index rose 1.57% to 5,371.10. Energy equipment, office electronics, and utilities edged higher; interactive media, aerospace, software, and semiconductors fell.
Australian Stock Market:
The S&P/ASX 200 (XJO) climbed 0.80% to 8,927.80. Metals & mining, other energy, and oil & gas gained; interactive media, aerospace, software, and apparel declined.
Singapore Stock Market:
The Straits Times Index (STI) rose 0.43% to 4,965.50. Forestry products, building materials, and telecom services advanced; auto & parts, oil & gas, and industrial products fell.
Malaysian Stock Market:
The FTSE Bursa Malaysia KLCI fell 0.31% to 1,742.82. Energy, business trusts, and consumer goods rose; tech, utilities, and communications & media declined.
Key Events
First to Cross the Line! Memory Super Cycle Intensifies — Samsung Market Cap First to Break 1,000 Trillion Won
With the memory industry's super cycle gaining momentum under the AI boom, Samsung Electronics became the first Korean company to surpass the 1,000 trillion won market cap milestone (approximately $688 billion) on Wednesday.
According to Korea Exchange data, Samsung's market cap briefly reached about 1,002 trillion won intraday, with the share price climbing to 169,400 won (+1.13% from the previous close).
At close, Samsung shares settled at 169,100 won (+0.96%), with a market cap of approximately 1,001 trillion won.
Samsung's stock has been setting new highs since breaking 100,000 won on October 27 last year. Surging global investment in AI infrastructure has dramatically increased demand for memory chips, becoming the core driver of Samsung's rally.
After soaring 125% last year, Samsung shares have risen about 41% year-to-date in 2026. Industry observers expect the company to maintain solid earnings growth ahead.
Samsung is planning to expand its share in the high-end high-bandwidth memory (HBM) market, where it currently trails domestic rival SK Hynix.
Last week's earnings showed that intensified AI competition among tech giants exacerbated global memory chip shortages and drove sharp price increases. Samsung posted record operating profit and sales in Q4 last year, with operating profit up 208% YoY.
Samsung forecasts sustained strong demand for memory chips ahead. The company also stated that its next-generation HBM chip (HBM4) is expected to begin shipments this quarter.
Recent reports indicate Samsung and SK Hynix plan to significantly raise NAND flash prices in the first half of this year, with product margins potentially reaching 40–50% — the highest in nearly a decade.
Intel CEO Lip-Bu Tan predicted Tuesday that the memory chip shortage will persist for at least another two years, with relief not likely until 2028.
As global semiconductor executives grow increasingly concerned about memory supply shortages, analysts expect the seller's market dominated by Samsung and SK Hynix to continue.
US Sells, Then Asia Follows! AI Tsunami Continues to Hammer Software Stocks: Is the Wolf Really Here This Time?
On Wednesday (February 4), Asian software stocks fell sharply, extending the global selloff from overnight, as investors grew increasingly worried that AI's rapid advancement could disrupt traditional software business models.
Several software firms led declines in Asian regional markets. Japanese IT services and systems integrator TIS plunged more than 15%, Trend Micro fell over 8%, and NS Solutions dropped nearly 7%.
“AI is making tech industry competition even fiercer,” said Ed Yardeni, president of Yardeni Research.
“Software stocks took a beating after Anthropic rolled out new tools for its Cowork product,” he added. “The utility of the new tools is yet to be proven, but investors have already decided to lower software valuations.”
Software companies, long favored for their sticky subscriptions and stable renewals, now face a severe test — AI not only threatens to automate workflows and compress pricing power but also lowers barriers for new competitors to enter the market.
UBS senior equity strategist Vey-Sern Ling said: “For the sector to regain valuations, companies must prove AI can become a growth engine rather than a pure competitive threat — and convincing skeptical investors may take longer than usual.”
Ling noted that UBS prefers infrastructure software (lower risk of AI disruption) and cybersecurity (where pricing power remains and AI can drive upsell).
Ortus Advisors analyst Andrew Jackson wrote in a report: “The current situation is particularly concerning for software companies, as AI could completely replace traditional lock-in SaaS products, destroying their business models.”
The selloff in software had already intensified overnight in U.S. trading. The pressure was clear across the sector: London Stock Exchange Group (with large data analytics business) -13%, Thomson Reuters -16%, CS Disco Inc. -12%, LegalZoom.com Inc. -20%.
According to estimates, two S&P sector indices tracking software, financial data, and exchanges lost a combined ~$300 billion in market cap on Tuesday. The volatility contributed to a 1.4% drop in the tech-heavy Nasdaq Composite.
In Asia's tech space, one silver lining for investors: losses were mainly concentrated in software stocks, as the broader regional tech sector remains dominated by hardware makers — especially chipmakers — who have been primary beneficiaries of the AI investment boom. This contrast helped cushion regional benchmark indices.
“During this uncertainty, Asia's tech sector appears better positioned thanks to its higher hardware weighting, where earnings momentum remains strong,” said Gary Tan, portfolio manager at Allspring Global Investments.
Tan added: “Compared to the U.S. and Europe, pure software stocks have a relatively small weight in Hong Kong and A-share indices, and their businesses are less prone to disruption — many U.S. foundation models have limited access to the Chinese domestic market.”
Institutional Views
Goldman Sachs: Western Flows Drove January Precious Metals Action — Upside Risk to Gold Forecast
Goldman Sachs said it continues to see significant upside risk to its December 2026 gold price target of $5,400/oz. The bank noted that January's price action was largely driven by Western fund flows rather than speculation — silver saw sharper adjustments due to persistently tight liquidity in London. In silver, beyond gold-like bullish options structures, ongoing London liquidity tightness added extra volatility.
Danske Bank: Dollar Short-Term Bias Tilts Up Post-Warsh Nomination
Danske Bank's Stefan Mellin wrote that Trump's nomination of Warsh as Fed Chair tilts short-term risks toward a stronger dollar. The move appears to ease concerns over potential threats to Fed independence and has prompted some unwinding of political risk premium baked into the dollar. He noted that late-January dollar selling was driven by policy unpredictability risks. The relief in short-term political uncertainty could “restore dollar-fundamental correlation and open a tactical window for dollar rebound.”
ING: Market Over-Priced RBA Hikes — AUD Faces Downside Risk
ING's Francesco Pesole said the AUD faces downside risk as markets have over-priced further RBA hikes. The RBA is expected to raise the cash rate to 3.85% on February 3. Last year, the RBA cut rates three times while forecasting core inflation near the 2–3% midpoint target by end-2025.
In reality, core inflation annualized at 3.9% in H2 2025, with unemployment falling. Pesole believes the RBA would not have cut 75 bps last year with this data. He sees a February hike, with risks tilted toward another in May.