APAC Market Wrap - Mar 18
China Equity Markets: The Shanghai Composite gained 0.32%, while the Shenzhen Component rose 1.05% and the ChiNext Index surged 2.02%.
The computing power supply chain rallied sharply, with CPO (Co-packaged Optics) concepts rebounding across the board. Computing power leasing and memory chip concepts also trended higher, while the chemicals sector declined.
Hong Kong Equity Markets: All three major Hong Kong indices closed in positive territory. The Hang Seng Index (HSI) rose 0.61% to close at 26,025.42; the Tech Index edged up 0.01% to 5,108.30; and the HSCEI gained 0.10% to 8,835.50.
The market showed clear structural divergence. Tech giants, AI applications, storage, optical communications, and power equipment were active, while pork, aviation, and automotive stocks faced correction.
Japan: The Nikkei 225 surged 2.87% to 53,700.39, led by broad gains in shipping, utilities, and petroleum.
South Korea: The KOSPI soared 5.04% to 5,925.00, driven by life insurance, semiconductors, and construction.
Australia: The S&P/ASX 200 rose 0.31% to 8,640.60. Aerospace, semiconductors, and furniture gained, while biotech and healthcare declined.
Singapore: The STI climbed 1.34% to 5,002.17, supported by forestry products, healthcare, and education.
Malaysia: The KLCI gained 1.10% to 1,729.81, with healthcare and utilities leading the advance.
Key Events
South Korea Secures "Priority Status" for UAE Crude; Additional 18 Million Barrels Secured
Amid the global oil supply squeeze triggered by the Middle East crisis, the UAE government has pledged to prioritize South Korea in its petroleum deliveries. Kang Hoon-sik, Chief of Staff to the President, announced Wednesday (March 18) that South Korea will import an additional 18 million barrels of crude.
The deal followed high-level strategic talks in the UAE. Kang stated that the UAE clarified South Korea is its "primary target" for supply during this emergency. The cargo will be transported via three UAE-flagged tankers (6M barrels) and six South Korean vessels (12M barrels).
The Battle to Curb Oil Prices Intensifies as U.S. "Runs Out of Ammunition"
Despite deploying the Strategic Petroleum Reserve (SPR) and issuing a one-month waiver for Russian tanker-borne oil, the U.S. has struggled to halt the surge in energy prices. Brent crude, which spiked to $120/bbl before briefly retracing to $80, has stabilized around the $100 mark.
Analysts warn that a prolonged closure of the Strait of Hormuz could send prices to $150 or even $200/bbl. Trump’s calls for a "Joint Fleet" to reopen the strait have yet to see any takers. Strategists warn that the exhaustion of emergency measures leaves the market exposed to unpredictable upside risks, potentially impacting the Republican Party’s prospects in the November midterm elections.
"Memory Famine" to Persist; Samsung Executive: AI Wave Sustains Robust Demand
Samsung Electronics expects chip demand to remain strong throughout the year, fueled by the global AI boom, though rising memory prices may dampen shipments of PCs and smartphones. "We expect a favorable business environment due to growing AI demand and the resulting persistent shortage in memory supply," said Co-CEO Jun Young-hyun at the company’s annual shareholder meeting.
However, he noted risks including macroeconomic uncertainties, tariff issues, and cost pressures on finished goods like TVs and appliances. Samsung shares have outperformed the KOSPI this year, rising 62% since January to hit multiple record highs.
Institutional Perspectives
Citi: Brent Crude Set to Rally Toward $110-$120 in Near Term
Citi has raised its short-term baseline forecast for Brent crude to the $110-$120 per barrel range.
Analysts led by Max Layton noted in a recent report that while oil supply disruptions could hit 11 million to 16 million barrels per day (bpd) over the next 4–6 weeks—slightly lower than the 20 million bpd previously feared at risk in the Strait of Hormuz—the supply-demand balance remains tight. However, the bank anticipates the Middle East conflict will begin to moderate by late April.
J.P. Morgan: The "Buy the Dip" Consensus Has Effectively Collapsed
J.P. Morgan strategists observed a fundamental shift in investor sentiment, noting that the traditional "buy the dip" mentality has evaporated as the market braces for a protracted conflict.
This shift suggests that selling into volatility now carries higher risk. Despite the broader caution, the bank maintains a constructive long-term view, advising investors to leverage current price weakness to increase exposure, citing a positive fundamental backdrop and the likelihood that political pressures will prevent the crisis from dragging on indefinitely.