APAC Market Wrap - Apr 2

China Equities: The Shanghai Composite fell 0.74%, the Shenzhen Component dropped 1.6%, and the ChiNext Index slid 2.31% at the close. The pharmaceutical sector bucked the trend with a late-session rally, while computing power leasing concepts faced a collective correction.

 

Hong Kong Equities: Hong Kong markets will be closed tomorrow for Good Friday. Major indices exhibited a volatile downward trend this week, driven by external fluctuations, divergent earnings reports, and recurring geopolitical tensions.

 

Hang Seng Index: Rose 0.66% for the week to 25,116.53.

 

Hang Seng Tech Index: Fell 2.06% for the week to 4,679.10.

 

H-Share Index: Edged up 0.04% for the week to 8,456.92. Defensive and safe-haven plays outperformed, while aviation and gold mining stocks faced broad selling pressure.

 

Japan Equities: The Nikkei 225 rose 0.48% to 46,565.74. Aluminum, computing, and gold sectors saw modest gains, while footwear and oil/gas sectors suffered heavy losses.

 

South Korea Equities: The KOSPI plummeted 4.26% to 5,052.46. Trading companies, aerospace/defense, and energy equipment were among the few sectors to gain.

 

Australia Equities: The S&P/ASX 200 declined 1.06% to 8,579.5. Defensive retail and telecommunications rose, while apparel, home building, and semiconductors fell sharply.

 

Singapore Equities: The Straits Times Index (STI) fell 0.57% to 4,947.50. Medical equipment and pharmaceuticals advanced, while software and semiconductors declined.

 

Malaysia Equities: The FTSE Bursa Malaysia KLCI dropped 0.65% to 1,698.30. Energy and plantations rose, while transport/logistics and tech sectors retreated.

Key Events

Korean Chip Stocks Collateral Damage? Top Fund Manager Sees "Ideal Entry Point"

 

Arjun Jayaraman, who manages a $3.4 billion EM fund at Causeway Capital Management, argues that South Korean memory chipmakers have been unfairly penalized by the Iran conflict.

 

Despite recent rallies, valuations for leaders like Samsung Electronics and SK Hynix remain depressed. Jayaraman expects these stocks to be the primary beneficiaries of any de-escalation, contrasting with peers who slashed Korean exposure over the past month.

 

Goldman Sachs: Global Hedge Funds Suffer Largest Drawdown in Four Years

 

After a stellar 2025, hedge funds hit a "wall" in Q1 2026. Goldman Sachs reports that March saw the largest monthly drawdown for global hedge funds since January 2022.

 

Driven by the Iran hostilities, Asia-focused long/short funds plunged 7.3% in March, while European and U.S. funds fell 6.3% and 4.3%, respectively. The TMT (Tech, Media, Telecom) sector was hit hardest, retreating 7.8% in March and finishing the quarter down 11.8%.

Institutional Perspectives

ING: Francesco Pesole suggests that a reopening of the Strait of Hormuz is a prerequisite for a significant dollar decline. Without a clear timeline for the waterway's reopening, the DXY is unlikely to return to its March 23 low of 99.0.

 

Vaneck: Head of Investment Russel Chesler notes that markets remain skeptical of President Trump’s recent rhetoric. The "when will the war end?" uncertainty continues to drive volatility, pushing the global economy toward a stagflationary environment of slowing growth and rising inflation expectations.

 

Pepperstone: Strategist Dilin Wu describes Trump’s remarks as "disappointing," noting that declaring victory while threatening further strikes on Iranian power infrastructure signals a "business as usual" approach. The "Maximum Pressure" strategy appears to remain the administration’s primary preference.