APAC Market Wrap - Feb 5
Chinese Stock Markets:
At close, the Shanghai Composite Index fell 0.64%, the Shenzhen Component Index declined 1.44%, and the ChiNext Index dropped 1.55%. Sector highlights: big consumer stocks surged, with food & beverage, retail, film & cinema chains, and travel & hotels taking turns leading gains; non-ferrous metals, grid equipment, oil & gas, and other sectors led declines.
Hong Kong Stock Market:
Hong Kong's major indices rebounded collectively today. The Hang Seng Index rose 0.14% to 26,885.24; the Hang Seng Tech Index gained 0.74% to 5,406.13; and the Hang Seng China Enterprises Index advanced 0.50% to 9,093.34.
Market action showed non-ferrous metals, optical communications, and commercial aerospace stocks under pressure, while new consumption and pharma names bucked the trend with strength.
Japanese Stock Market:
The Nikkei 225 fell 0.88% to 53,818.04. By sector, pharmaceuticals, air transport, and retail advanced; non-ferrous metals, shipping, and machinery declined.
South Korean Stock Market:
The KOSPI Composite Index dropped 3.86% to 5,371.10. Office electronics, utilities, textiles, hotels, and card stocks edged higher; aviation, non-ferrous metals, semiconductors, and healthcare management led declines.
Australian Stock Market:
The S&P/ASX 200 (XJO) fell 0.43% to 8,889.20. Alcoholic beverages, packaging, and medical equipment rose; aerospace, semiconductors, and other energy declined.
Singapore Stock Market:
The Straits Times Index (STI) rose 0.21% to 4,975.87. Conglomerates, forestry products, and pharmaceutical manufacturers gained; apparel, furniture, and industrial products fell.
Malaysian Stock Market:
The FTSE Bursa Malaysia KLCI declined 0.68% to 1,731.02. Trusts, real estate, and consumer goods rose; tech and healthcare fell.
Key Events
U.S. Power Shortage Triggers Global Gas Turbine Shortage — Europe & Asia May Be Forced to Accelerate Renewable Energy Push
The AI data center construction boom has caused a U.S. power shortage, forcing tech giants and utilities to expand electricity supply to meet surging demand — with natural gas seen as the best solution.
Goldman Sachs noted in a report last year that natural gas will benefit from growing U.S. power demand and the need for round-the-clock reliable supply. It is the most flexible of all energy sources, and the U.S. has abundant natural gas reserves.
However, even with ample natural gas resources, the U.S. faces another bottleneck — key components like gas turbines required for building gas-fired power plants. Wood Mackenzie warned last year that the gas turbine manufacturing supply chain crisis is one of the most severe bottlenecks in meeting data center power needs.
Sony Operating Profit Surges 22% — But Earnings Hide Concerns: Memory Price Surge May Hit Hardware Business
Sony reported Thursday (February 5) that quarterly operating profit beat expectations with a 22% increase and raised its full-year outlook.
The yen's weakness helped offset the impact of slowing PlayStation 5 sales.
The report showed Q3 fiscal 2025 (three months ended December) operating profit of 515 billion yen (+22% YoY, beat expectations); net profit 377.3 billion yen (+11%); sales +1% to 3.71 trillion yen.
The company raised its full-year outlook to operating profit of 1.54 trillion yen (above prior 1.43 trillion yen guidance).
Sony also announced an expansion of its share buyback program to 150 billion yen (from 100 billion yen).
Driven by the strong earnings, Sony shares rose as much as nearly 6% in Asian trading Thursday — the biggest gain since November last year.
TSMC Plans 3nm Production in Japan — Investment Raised to $17 Billion
TSMC has formally notified the Japanese government that it will upgrade the main process at its second wafer fab in Japan (via subsidiary JASM) from the planned 6nm to 3nm — marking Japan's first 3nm production capability.
Reports indicate TSMC originally planned $12.2 billion investment in the fab for 6–12nm manufacturing, but with the shift to 3nm, total investment will rise to $17 billion.
TSMC will discuss the plan revision with the Japanese government. Reports say Japan will support the updated plan to strengthen domestic semiconductor manufacturing and consider its contribution to economic security.
Previously, the Japanese government provided subsidies for TSMC's Kyushu expansion; it is reportedly considering additional support for the new investment plan.
Institutional Views
Reuters Poll: Geopolitical Risks & Central Bank Buying Support Gold — 2026 Price May Hit New High
A Reuters poll shows gold is expected to hit new highs in 2026, with geopolitical uncertainty and strong central bank buying as main drivers. A three-week survey of 30 analysts and traders gave a median 2026 gold price forecast of $4,746.50/oz — the highest annual forecast since Reuters began the poll in 2012, significantly above the $4,275 median from October last year. A year ago, the median 2026 forecast was just $2,700.
Analysts say drivers — geopolitical risks, ongoing central bank purchases, Fed independence concerns, rising U.S. debt, trade uncertainty, and “de-dollarization” — will continue supporting gold in 2026. Silver forecasts were also raised, with 2026 median at $79.50/oz (vs. $50 in October last year).
UBS: Expects Global Stocks Up ~10% by Year-End — Recommends Diversifying to China, Japan, Europe
UBS Wealth Management's Chief Investment Office (CIO) stated in its latest market view that global equities are expected to rise about 10% by year-end. The U.S. market remains the core of equity allocations with further upside potential. But regions outside the world's largest economy also offer appeal: strategic autonomy, regional fiscal expansion, and structural reforms could create winners locally.
UBS is particularly bullish on China, Japan, and Europe. In China, clear government support for domestic AI models and chip manufacturing lays the foundation for further tech stock gains. Meanwhile, in a low-rate environment, domestic investors chasing yield, healthcare firms going global, new consumption models, and grid modernization create structural tailwinds for financials, healthcare, consumption, materials, and power equipment sectors.
Nikko Securities: Intervention Expectations Can't Stop Yen Weakness — Downside Pressure Remains
Despite forex traders staying highly vigilant about possible Japanese government intervention, SMBC Nikko Securities strategist Rinto Maruyama believes the yen may weaken further. In a note, Maruyama wrote: “If authorities remain on the sidelines amid current yen weakness, or if concerns over fiscal expansion intensify, investors' vigilance about yen appreciation could weaken.” He added: “Even with the intervention cloud lingering, the market seems to have reached consensus that USD/JPY still has upside bias.”
Goldman Sachs: Japan Election Approaching — Fiscal Risks Clearly Tilted Up
With Japan's snap election this Sunday approaching, forex markets are watching closely. The LDP-led ruling coalition is widely expected to win a majority. Goldman Sachs' Karen Reichgott Fishman warned that “fiscal risks remain clearly tilted to the upside.”
She noted spending concerns are pressuring Japanese bonds and the yen unless the BOJ shifts to faster rate hikes. Yen weakness could reignite intervention talk — such expectations supported the yen last month. She said stronger yen would require “more restrained fiscal ambition, weaker inflation outcomes, or rising global recession risk.”