APAC Market Wrap - Mar 26

China Equities: The domestic benchmarks closed lower, with the Shanghai Composite shedding 1.09%, the Shenzhen Component dropping 1.41%, and the ChiNext Index sliding 1.34%. Sector-wise, power generation remained a bright spot, while power grid equipment and fiber optics faced intraday volatility and selling pressure.

 

Hong Kong Equities: Hong Kong’s major indices trended lower throughout the session as cautious sentiment prevailed. The Hang Seng Index (HSI) tumbled 1.89% to close at 24,856.43, while the Hang Seng Tech Index slumped 3.28% to 4,761.54. The Hang Seng China Enterprises Index (HSCEI) fell 2.25% to 8,389.93. Energy names, including oil and coal, bucked the trend to post gains, while tea chains, jewelry, and semiconductor/memory chip stocks weakened.

 

Japan: The Nikkei 225 edged down 0.27% to 53,603.65. Mining, shipping, and oil sectors led gains, while insurance, electrical equipment, and glass sectors faced modest declines.

 

South Korea: The KOSPI plummeted 3.22% to 5,460.46. Bio-engineering and packaging materials advanced, whereas insurance, energy equipment, and semiconductors dragged the index lower.

 

Australia: The S&P/ASX 200 slipped 0.10% to 8,525.70. Gains in agriculture and aerospace were offset by sharp declines in interactive media and semiconductors.

 

Singapore: The STI fell 0.34% to 4,887.76. Oil & gas and consumer packaging trended higher; industrial products and personalized services declined.

 

Malaysia: The FTSE Bursa Malaysia dropped 0.34% to 1,710.89. Energy and healthcare sectors advanced, while finance and construction saw a collective retreat.

Key Events

Japan Taps Strategic Reserves for First Time in Four Years; Release Reaches Historic 8.5 Million Kiloliters

 

On Thursday (March 26), the Japanese government initiated the release of national oil reserves to ensure domestic stability amid the ongoing blockade of the Strait of Hormuz. This marks the first such intervention since the 2022 Russia-Ukraine conflict. The release of 8.5 million kiloliters represents approximately 30 days of domestic consumption.

 

First Iranian LPG Cargo Set for India Following U.S. Temporary Waiver

 

Indian Oil Corp. (IOC) has purchased Iranian Liquefied Petroleum Gas (LPG) for the first time in nearly eight years to address tightening supplies of cooking fuel. IOC will share the cargo with state-run peers Bharat Petroleum and Hindustan Petroleum.

 

Samsung, SK Group Issue "Emergency Energy Orders" as Middle East Conflict Escalates

 

Leading South Korean conglomerates have launched aggressive energy-saving mandates. Samsung Electronics and its affiliates implemented a "10-day vehicle rotation system," restricting parking access based on license plate numbers (excluding EVs, hydrogen vehicles, and those for the disabled). Samsung also plans to cut lighting by 50% in non-work areas and rooftops.

Institutional Perspectives

Probability of U.S. Recession Upgraded Across Major Tiers

 

Extended hostilities between the U.S., Israel, and Iran have heightened downside risks for the U.S. economy. Moody’s Analytics models now place the probability of a recession in the next 12 months at 48.6%. Goldman Sachs raised its forecast to 30%, while Wilmington Trust and EY-Parthenon project odds of 45% and 40%, respectively (up from a baseline of ~20%). Moody’s Chief Economist Mark Zandi warned that if high oil prices persist through late Q2, a recession is "all but certain."

 

UBS: Current Gold Slump a Correction Within a Long-Term Secular Bull Run

 

UBS Global Wealth Management (CIO) notes that while gold faces headwinds from energy-driven inflation and a strengthening dollar, the regional supply-demand disruption in the Middle East is the primary driver of current volatility. However, UBS views this as a long-term buying opportunity for portfolio diversification. The bank maintains a price target of $5,900/oz by early 2027, citing an eventual pivot in global growth dynamics.

 

TD Securities: Energy Shock Unlikely to Trigger Aggressive Fed Reaction

 

Analysts at TD Securities suggest that despite rising inflation expectations, the Federal Reserve is likely to maintain a "wait-and-see" posture. The central bank leadership still leans toward rate cuts in late 2026, provided long-term inflation expectations remain anchored and second-round effects are contained.