APAC Market Wrap - Mar 23
China: Mainland markets fell sharply. The Shanghai Composite dropped 3.63%, the Shenzhen Component slid 3.76%, and the ChiNext Index fell 3.49%. Sector-wise, green energy concepts bucked the trend, while precious metals led the decliners and the tourism sector continued its correction.
Hong Kong: Broad-based retreat. The Hang Seng Index fell 3.54% to 24,382.47; the Hang Seng Tech Index dropped 3.28% to 4,712.48; and the HSCEI fell 3.11% to 8,307.82. Notable pullbacks were seen in gold, aviation, memory chips, telecommunications, and AI applications.
Japan: The Nikkei 225 plummeted 3.48% to 51,512.49. Shipping, non-ferrous metals, and real estate sectors saw a collective downturn.
South Korea: The KOSPI suffered a massive "bloodletting," diving 6.49% to 5,405.75. Media, securities, and machinery sectors led the broad sell-off.
Australia: The S&P/ASX 200 declined 0.74% to 8,365.9. Diversified financials and insurance managed gains, while aerospace, agriculture, and semiconductors faced heavy selling.
Singapore: The Straits Times Index (STI) fell 2.17% to 4,841.3. Healthcare services and utilities rose, while metals, non-alcoholic beverages, and industrial products declined.
Malaysia: Market closed.
Key Events
South Korean Markets Hemorrhage; Officials Downplay Crude Supply Risks
As the U.S.-Iran conflict intensifies, Korean investors fear an imminent energy crisis, leading to a massive sell-off on Monday. In response, government officials emphasized that no major oil supply disruptions are expected next month, citing secured alternative channels and plans to tap strategic petroleum reserves.
While local refiners warned that current inventories only cover four to five weeks, Yang Gi-uk of the Ministry of Trade, Industry and Energy noted that while Dubai crude at $158/bbl is unprecedented, real-time monitoring and strategic releases should prevent a supply failure.
Gold Sinks for Ninth Day, Breaching $4,100 as Investors Abandon Safe Havens
Precious metals saw another leg down during Monday’s European session.
Following its worst weekly drop in 43 years, gold has now declined for nine consecutive sessions. Escalating Middle East tensions have stoked inflation fears and hawkish global rate expectations, turning gold into a "liquidity provider" rather than a safe haven. Analysts suggest the rally over the past year turned gold into an "overcrowded consensus trade," leaving it vulnerable to liquidation as investors sell winners to meet margin calls in other asset classes.
Berkshire Expands Japan Footprint: ¥287.4 Billion Strategic Stake in Tokio Marine
A filing with Japan's Ministry of Finance revealed that Tokio Marine Holdings has entered a strategic partnership with Berkshire Hathaway, selling ¥287.4 billion (approx. $1.8 billion) in shares to the group. Berkshire's core reinsurance entity, National Indemnity, will take a 2.49% strategic stake in Tokio Marine.
Institutional Views
Bank of America: Maintains a medium-term bearish view on the USD. While the greenback has appreciated against G10 peers since the Iran conflict began, BofA notes that rising rate expectations in other G10 nations have capped the USD’s upside. However, as the war's impact hits the real economy, upside risks for the dollar may dominate in the short term.
UBS: Upgraded oil price forecasts for 2026-2027 to reflect the closure of the Strait of Hormuz. UBS raised its 2026 forecast by $14 to $86/bbl and its 2027 forecast by $10 to $80/bbl, assuming flows gradually—but not fully—recover starting in April.
HSBC: Expects the Fed to remain on hold throughout 2026 and 2027. With the policy rate at 3.50%-3.75%, HSBC believes surging energy prices and geopolitical risks will keep the Fed in "wait-and-see" mode, supporting haven demand for the USD.
Fitch (BMI): Warns that the shift from safe-haven allocations to macro-driven trading—fueled by a stronger dollar and lower odds of Fed easing—could increase downside pressure on gold.