APAC Market Wrap - Mar 12

Chinese Equities: Mainland benchmarks closed lower on Tuesday.

 

The Shanghai Composite slipped 0.1%, while the Shenzhen Component and ChiNext Index declined 0.63% and 0.96%, respectively. Sector-wise, green energy concepts saw a breakout and the chemical sector continued to strengthen, while the military-industrial sector showed weakness.

 

Hong Kong Market: The three major Hong Kong indices underwent a collective correction today. The Hang Seng Index (HSI) fell 0.70% to 25,716.76; the Hang Seng Tech Index dropped 0.54% to 5,027.64; and the Hang Seng China Enterprises Index (HSCEI) eased 0.07% to 8,699.55.

 

In terms of market dynamics, coal and wind power stocks staged a strong breakout, while technology and healthcare stocks generally retraced.

 

Japan Market: The Nikkei 225 fell 1.04% to 54,452.96. By industry, several sectors including mining, other products, and utilities rose collectively, while real estate, fishery, and miscellaneous sectors declined.

 

South Korea Market: The KOSPI declined 0.48% to 5,583.25. By industry, energy equipment, healthcare management, and retail sectors gained collectively, while life insurance, electronics, food, and aviation sectors saw slight declines.

 

Australia Market: The S&P/ASX 200 (XJO) fell 1.31% to 8,629.00. Petroleum, other products, and packaging sectors advanced, while agriculture, semiconductors, and aerospace sectors traded lower.

 

Singapore Market: The Straits Times Index (STI) edged down 0.17% to 4,855.33. Construction materials, other energy, and oil and gas sectors gained collectively, while transportation, pharmaceutical manufacturers, and cyclical retail sectors declined.

 

Malaysia Market: The FTSE Bursa Malaysia KLCI rose 0.13% to 1,711.01. Plantations, construction, and industrial parks advanced, while transportation and logistics, closed-end funds, and real estate declined.

Key Events

South Korean Retail Investors Bet on Chinese Humanoid Robotics Leadership

 

South Korean retail investors are aggressively purchasing assets in the Chinese robotics industry, signaling strong confidence in China's competitive edge in the humanoid robotics sector. According to the Korea Exchange (KRX), among the seven ETFs listed in Korea tracking humanoid robotics, those invested in Chinese firms have reached a scale nearly equal to domestic South Korean funds—both approximately 650–680 billion won ($440–$460 million)—surpassing the size of U.S.-focused funds.

 

Mirae Asset Global Investments noted that China is building a comprehensive ecosystem, drawing parallels between the robotics supply chain and China's existing global dominance in electric vehicles (EVs).

 

Goldman Sachs Hikes Oil Forecast: Blockade Could Push Prices Past 2008 Peaks

 

On Thursday, Goldman Sachs raised its Q4 2026 price forecasts for Brent and WTI to $71 and $67 per barrel, respectively.

 

The revision stems from projections that disruptions in the Strait of Hormuz may last longer than previously anticipated. The firm warned that if the blockade persists through late March, international oil prices could exceed the record peaks seen in 2008.

Institutional Perspectives

Goldman Sachs: The firm's trading desk suggests that current hedge fund positioning has set the stage for a sharp "short-covering" rally.

 

While speculative investors remain largely long on individual stocks, they have built record-high hedges (short positions) in ETFs and index futures—the highest since September 2022.

 

John Flood, Head of Americas Equities Execution Services, noted that any "peace" headline could trigger a 2% to 3% jump in indices within a short timeframe, stating that "right-tail risk is currently more extreme than left-tail risk."

 

JPMorgan: Economists warn that sustained high oil prices may force Asian central banks toward more hawkish stances.

 

The energy shock is viewed as a significant trade blow to the region. While fiscal policy will be the first line of defense to buffer households, JPMorgan notes that rising prices increase the likelihood of policy tightening in Singapore and Malaysia, while reducing the probability of rate cuts in Indonesia and the Philippines.

 

The Bank of Korea’s next move will depend on whether second-round effects impact core inflation.