APAC Market Wrap - Mar 30
China Equities: The Shanghai Composite edged up 0.24% at the close, while the Shenzhen Component and ChiNext Index retreated 0.25% and 0.68%, respectively.
Commercial aerospace concepts staged a V-shaped recovery after an initial dip, while the aluminum sector remained strong throughout the session.
Hong Kong Equities: Major indices closed collectively lower. The Hang Seng Index fell 0.81% to 24,750.79, the Tech Index dropped 1.84% to 4,690.80, and the H-Share Index declined 0.65% to 8,399.12. Gold and non-ferrous metals outperformed, while home appliances, pork, and software sectors faced selling pressure.
Japan Equities: The Nikkei 225 plummeted 2.79% to 51,885.85. Banking, transportation equipment, and glass sectors suffered the steepest declines.
South Korea Equities: The KOSPI dropped 2.97% to 5,277.30. Energy equipment, electrical products, and trading companies saw gains, while air freight, securities, and communication equipment fell.
Australia Equities: The S&P/ASX 200 declined 0.65% to 8,461.0. Home building, diversified media, and alternative energy rose, while semiconductors, software, and restaurants saw significant drops.
Singapore Equities: The Straits Times Index (STI) eased 0.02% to 4,897.26. Medical equipment, apparel, and utilities advanced; industrial products, interactive media, and semiconductors declined.
Malaysia Equities: The FTSE Bursa Malaysia KLCI fell 1.45% to 1,687.90. Plantations, industrials, and energy sectors gained, whereas construction, telecommunications, and healthcare retreated.
Key Events
JPMorgan Asia Head: Middle East Conflict Hits Asia Hardest, China as a Relative Safe Haven
Rajiv Batra, JPMorgan’s Head of Asia and Co-Head of Global EM Equity Strategy, stated Monday that while the Middle East conflict disproportionately impacts Asian nations, China and Malaysia remain relatively shielded from the oil shock due to lower crude import dependency.
South Korea Exports Surge to 5-Year High Driven by Semiconductor Demand
A survey released Monday indicates South Korea’s March exports are expected to grow at their fastest pace in nearly five years, jumping 44.9% year-on-year. This marks the 10th consecutive month of gains, fueled by an AI-driven surge in chip demand. However, economists warn the regional conflict is simultaneously driving up import costs and domestic inflation.
BoJ Governor Ueda Signals Commitment to Steady Rate Hikes Amid Inflationary Pressure
Bank of Japan Governor Kazuo Ueda indicated Monday that the central bank may consider raising interest rates in the coming months as Middle East hostilities intensify domestic inflationary pressures. With the Yen weakening past the 160 per dollar mark—its lowest since July 2024—Ueda noted that while the BoJ does not target exchange rates directly, currency volatility is a critical factor impacting economic stability and price development.
Institutional Perspectives
Nomura: Pushes Fed rate cut expectations back to September and December. Chief U.S. Economist Jeremy Schwartz cites renewed inflationary risks from the Middle East and delays in the confirmation process for Fed Chair nominee Kevin Warsh as primary drivers for the revision.
TD Securities: Suggests U.S. Treasury yields may remain elevated in the near term but could face a "ceiling" as growth risks emerge. Strategists noted that while the market is pricing in rate hikes, it may be overlooking the downside risks to economic growth, which could cap further yield increases.
BNP Paribas: Signals that the BoJ may "pull the trigger" on a rate hike in April. Economists highlight that the pass-through of rising import costs to domestic prices is significant, compelling policymakers to prioritize upside inflation risks.
Société Générale: Forecasts that Brent crude could average $125 per barrel in April, with an increasing probability of prices breaching the $150 threshold if hostilities continue to escalate.