APAC Market Wrap - Feb 6

Chinese Equity Markets: By the close, the Shanghai Composite fell 0.25%, the Shenzhen Component dropped 0.33%, and the ChiNext Index declined 0.73%. By sector, the chemical industry showed collective strength; on the downside, the broad consumer sector slumped, with white spirits (baijiu) and tourism/hotels leading the losses.

 

Hong Kong Equity Markets: The three major Hong Kong indices all closed lower this week. By Friday's close, the Hang Seng Index had fallen a cumulative 3.02% to 26,559.95 points; the Tech Index fell a cumulative 6.51% to 5,346.20 points; and the Hang Seng China Enterprises Index fell a cumulative 3.07% to 9,031.38 points. In terms of market performance, lithium batteries, autos, petroleum, and tea-and-beverage stocks strengthened, while cryptocurrency and AI application stocks weakened.

 

Japanese Equity Market: The Nikkei 225 rose 0.81% to 54,253.68 points. By sector, mining, construction, and banking all rose, while pharmaceuticals and pulp/paper declined.

 

South Korean Equity Market: The KOSPI composite index fell 1.44% to 5,089.14 points. Energy equipment, communications equipment, banking, and insurance rose slightly, while electronics, communications services, and healthcare declined.

 

Australian Equity Market: The S&P/ASX 200 fell 2.03% to 8,708.800 points. Aerospace, interactive media, semiconductors, and other energy sectors declined.

 

Singapore Equity Market: The Straits Times Index (STI) fell 0.83% to 4,934.41 points. Furniture, autos & parts, and industrial products rose, while diversified media, software, and personal services declined.

 

Malaysian Equity Market: The FTSE Bursa Malaysia KLCI rose 0.10% to 1,732.83 points. Closed-end funds, healthcare, and construction rose, while technology, real estate, and industrial products declined.

Key events

"Sell Everything" Sweeps Global Markets?

 

Investors Question Sustainability of Multi-Asset Rally Global markets underwent a sea change this week as tech stocks, precious metals, and cryptocurrencies saw widespread and sharp declines, severely dampening global investor sentiment. This universal sell-off is quite rare and has sparked discussions among analysts regarding a "sell everything" mentality. During Friday's Asian session, Chinese stocks saw broad declines, with the Shanghai Composite down 0.25%, the Shenzhen Component down 0.33%, and the ChiNext down 0.73%.

 

Hong Kong's Hang Seng Index fell 1.21%. South Korea's KOSPI closed down 1.44%, Australia’s benchmark fell 2.19%, and New Zealand’s NZ50 fell 0.17%. Japan’s Nikkei 225 was the only Asian market to close higher. Tony Sycamore, an Australian market analyst at trading and investment firm IG, pointed out that overnight markets were bleak.

 

As mentioned in previous flow reports, investors had previously moved from tech to cyclical stocks, but this has now turned into a "sell everything" mindset across stocks, crypto, and commodities. He added that people are questioning the major pillars that have supported the market over the past six months: AI, cryptocurrency, and precious metals. This increases the likelihood of a further market correction.

 

Passing on Cheap Russian Oil? India’s Reliance Reportedly Imports 2 Million Barrels of Venezuelan Crude

 

The U.S. and India are nearing a new trade agreement, which signals significant changes for the global energy industry. India will reduce imports of Russian crude as requested by the U.S. and shift toward Venezuelan oil. According to sources on Thursday, India's Reliance Industries has purchased 2 million barrels of Venezuelan oil from Vitol, marking Reliance's first purchase of Venezuelan energy in a year.

 

Following the U.S. arrest of Venezuelan President Maduro in January and the reaching of an energy supply agreement with Acting President Rodriguez, licenses were issued to trading firms Vitol and Trafigura. These firms, along with Chevron—which already has operations in Venezuela—are now exporting Venezuelan crude.

Institutional Views

JPMorgan: Strong Central Bank Demand May Drive Gold to $6,300/oz by Late 2026

 

JPMorgan stated that demand from central banks and investors this year is strong enough to eventually push gold prices to $6,300 per ounce by the end of 2026. Silver has high floor support in the short term, with a price range of approximately $75-$80 per ounce expected over the coming quarters.

 

TD Securities: USD Rally Expected in Q1, Sterling’s Strength Likely to Pause

 

TD Securities stated in a report that the recent strength of GBP/USD may be coming to an end, primarily driven by a rebound in the U.S. dollar. Analysts noted that the Pound's previous rise against the Dollar was largely due to broad USD selling. "Seasonally, the first quarter is typically a period of stronger U.S. data, and we may see the Dollar rebound somewhat against the Pound." Following the Bank of England's narrow vote to hold rates steady on Thursday, compounded by renewed concerns over a potential leadership challenge to PM Keir Starmer, GBP/USD fell 0.7% to 1.3548.

 

Deutsche Bank: ECB’s "Hold" Reflects a Balanced Policy Stance

 

Mark Wall, Chief European Economist at Deutsche Bank, said the ECB’s decision to keep policy rates unchanged was the right move. "At a moment like this, the central bank needs a good sense of balance, weighing the headwinds against the tailwinds." Wall noted that despite external vulnerabilities, the economy remains resilient, partly supported by German spending on defense and infrastructure.

 

OCBC: Consumption Momentum Continues; Singapore Retail Growth Projected at 3% This Year

 

OCBC economist Selena Ling noted in a report that after growing 2.8% in 2025, Singapore’s retail sales are expected to maintain growth of 2% to 3% this year. Better-than-expected 2025 GDP performance and a solid domestic labor market have supported private consumption. Looking ahead, a series of new events—including the BTS World Tour later this year—will bolster the retail sector. "The macroeconomic backdrop remains favorable, but the key will be monitoring domestic labor market conditions, particularly whether wage growth strengthens, which in turn will support domestic confidence and private consumption," Ling said.