APAC Market Wrap - Feb 27
China Equities:
The Shanghai Composite gained 1.09% this month, showing a trend of "surging followed by narrow consolidation," securing its third consecutive monthly gain. The Shenzhen Component rose 2.04%, while the ChiNext Index fell 1.08%.
From a sector perspective, market focus intensified significantly. Driven by price hike catalysts, sectors such as chemicals and non-ferrous metals performed prominently. Rotation within the chemical sector remained rapid.
Hong Kong Equities:
Trading for the three major Hong Kong indices concluded for the month, characterized by overall volatile adjustments. The Hang Seng Index fluctuated repeatedly around the 27,000-point level, while the Hang Seng Tech Index saw a particularly notable correction, with a cumulative monthly decline of over 10%.
By the close, the Hang Seng Index fell 2.76% to 26,630.54; the Hang Seng Tech Index fell 10.15% to 5,137.84; and the HSCEI fell 4.91% to 8,859.49.
Japan Equities: The Nikkei 225 rose 0.16% to 58,850.27. By industry, petroleum, mining, and construction sectors rose, while precision instruments declined.
South Korea Equities: The KOSPI fell 1.00% to 6,244.13. Automobiles, energy, and venture capital rose sharply, while display panels, electric utilities, insurance, and airlines declined.
Australia Equities: The XJO S&P/ASX 200 rose 0.25% to 9,198.60. Software, interactive media, and semiconductors rose, while non-alcoholic beverages, retail, and education declined.
Singapore Equities: The STI rose 0.62% to 4,995.07.
Semiconductors, forestry products, and furniture rose, while diversified media, hardware, and defensive retail declined.
Malaysia Equities: The FTSE Malaysia Index fell 1.40% to 1,716.61.
Healthcare and technology rose, while industrial products, real estate, and financial services declined.
Key events
KOSPI Ends Six-Day Rally as Foreign Investors Sell Nearly $5 Billion in Single Day
On Friday (Feb 27), global investors heavily sold South Korean stocks, setting a new record for single-day selling volume. This suggests that investors are choosing to take profits after the benchmark KOSPI surged nearly 50% this year.
On Friday, the KOSPI fell 1%, snapping its six-day winning streak. According to Korea Exchange data, foreign investors net sold 6.8 trillion won (approx. $4.7 billion) worth of Korean stocks during the regular session, while local institutions and retail investors were net buyers.
Dust Settles! Netflix Withdraws from Bidding as Paramount "Swallows" Warner for $111 Billion
With Netflix effectively withdrawing from the bidding for Warner, Paramount has finally won the acquisition battle that lasted for months.
On Thursday (Feb 26) local time, Warner Bros. Discovery stated that Paramount’s latest offer of $31 per share (totaling approximately $111 billion) was a "superior proposal" and gave Netflix four business days to update its bid.
However, Netflix subsequently stated it would not raise its offer and would exit the deal.
AI as "Software Doomsday"? J.P. Morgan Contradicts Market: Concerns Overblown, Now is the Best Time to Buy the Dip!
As "AI panic trades" continue to ferment, software stocks have performed poorly in recent weeks. Since the beginning of 2026, the sector's market value has evaporated by approximately $2 trillion, dragging down the stock prices of several tech giants.
Is AI really going to "eat" software? Is the situation as bad as the market imagines? NVIDIA CEO Jensen Huang refuted on Wednesday that the market has misjudged. J.P. Morgan followed suit, stating the market reacted excessively: "Today, investors willing to tune out the noise may be facing one of the best entry points for high-quality software companies in recent years."
JPM analysts pointed out in their latest report that the market is pricing in a catastrophe that won't happen for several years.
Chip Firm Rapidus Receives Government Capital! Japanese Authorities to Invest 100 Billion Yen to Become Largest Shareholder
On Friday, Japanese Minister of Economy, Trade and Industry Ryosei Akazawa announced at a press conference that the government will invest 100 billion yen (approx. $640 million) through the Information-technology Promotion Agency (IPA) into Rapidus, a domestic company dedicated to the mass production of cutting-edge chips.
This is part of the Takaichi administration's commitment to promoting the domestic chip manufacturing strategy.
This investment will make the Japanese government the largest shareholder of Rapidus. Under the new arrangement, the government will hold approximately 10% of Rapidus's voting shares, with most of the remaining equity held being non-voting.
Institutional Outlook
UBS stated it has downgraded its investment recommendation for US stocks to Neutral, as US equities may lag while growth in other regions accelerates. Strategists cited reasons including the relatively low sensitivity of US corporate earnings to global growth, high valuations, the trend of capital diversifying outside the US, and downside risks to the US dollar.
They stated: "The US has the lowest operating leverage among major regions; therefore, if global growth rises above 3.5%, US stocks will historically underperform." UBS expects global GDP growth of 3.4% in 2026.
Goldman Sachs pointed out that despite NVIDIA's revenue growing 73% year-over-year and providing optimistic guidance for its AI business, the stock still fell 4.5%, dragging down the semiconductor sector and the S&P 500. Analysts said this reflects a "sell the fact" move, profit-taking, and concerns over the sustainability of AI capital expenditures by hyperscale cloud providers.
AI spending is expected to grow 62% in 2026, down from 73% in 2025. Market focus is shifting to 2027, when capital expenditure may peak.
CITIC Securities: Alibaba and Tencent Bet on NPO; Focus on Scale-up Network Opportunities
CITIC Securities noted that AI computing networks are undergoing a critical period of evolution toward all-optical interconnection. NPO technology has become an ideal compromise solution for breaking physical bandwidth bottlenecks due to its excellent balance of signal integrity, power consumption, and maintainability.
Tech giants represented by Alibaba and Tencent are accelerating the implementation and standardization of NPO architecture, marking the technology's entry into the stage of large-scale commercial use.
CITIC Securities: Overseas Battery Companies' Revenue Grows in Q4 2025 but Profits Under Pressure
CITIC Securities pointed out that four overseas battery companies (LGES, Samsung SDI, SKI, Panasonic) saw overall profitability decline significantly quarter-on-quarter in Q4 2025. Except for Panasonic, the other three reported losses.
The main reason is that while revenue grew due to the rapid development of the energy storage business, the decline in power battery sales caused by the cancellation of North American EV subsidies and high operating costs for energy storage production lines put pressure on the profit side.