APAC Market Wrap - Apr 7

China Equities: Major indices edged higher as of the close. The Shanghai Composite rose 0.26%, the Shenzhen Component gained 0.36%, and the ChiNext Index climbed 0.36%. On the downside, the financial sector struggled, with insurance stocks leading the retreat.

 

Hong Kong Equities: Market closed.

 

Japan Equities: The Nikkei 225 rose 0.33% to close at 53,429.56. Sector-wise, petroleum, real estate, and glass saw modest gains, while non-ferrous metals, ICT, and mining faced sharp declines.

 

South Korea Equities: The KOSPI advanced 0.82% to 5,494.78. Household appliances, aerospace/defense, and display panels led the rally, while energy equipment and healthcare sectors dipped slightly.

 

Australia Equities: The S&P/ASX 200 surged 1.74% to 8,728.8. Dining, agriculture, and industrial distribution outperformed, while apparel and housing-related sectors declined.

 

Singapore Equities: The Straits Times Index (STI) fell 0.29% to 4,958.01. Personal services and asset management posted small gains, while tourism and furniture stocks trended lower.

 

Malaysia Equities: The FTSE Bursa Malaysia KLCI decreased 0.24% to 1,676.86. Healthcare and telecommunications rose, but tech and logistics sectors faced collective selling pressure.

Key Events

Hedge Fund Carnage: Mid-East Conflict Triggers Major Drawdowns; Andurand Surges 30%

 

As the U.S.-Iran hostilities cross the one-month mark, legendary hedge funds are bleeding capital. Tiger Global’s flagship fund reportedly dropped 7.3% in March. "Tiger Cub" funds followed suit: Maverick Capital fell 5% (with its Long Enhanced fund down 8.1%), Viking Global retreated 4.1%, and Coatue declined 4.8%. In contrast, commodities specialist Pierre Andurand reportedly notched a 30% gain, capitalizing on the massive spike in energy volatility.

 

Goldman Sachs: Tech Valuations Offer "Generous" Entry Point Amid War Defensive Play

 

Goldman Sachs argues that global tech stocks, following a historic period of underperformance, are now trading at "cheap" levels. The firm noted that the sector recently saw its worst relative return in 50 years.

 

Despite concerns over DeepSeek’s AI models and hyperscaler Capex, Goldman believes strong growth momentum and low valuations make tech a strategic "buy" that offers surprising defensiveness during the ongoing conflict.

 

The Great Scramble: U.S. Crude "Sold Out" as Asia and Europe Fight for Barrels

 

Physical premiums for WTI Midland have hit all-time highs as refiners scramble to replace Iranian and Middle Eastern supplies blocked by the Strait of Hormuz conflict.

 

Traders report that Asian buyers are outbidding Europeans for Atlantic Basin crude, with premiums reaching $30–$40 per barrel over benchmarks. Many state-owned refiners are now operating at a loss simply to maintain national energy security.

Institutional Perspectives

BofA: Despite surging oil, the bar for the Bank of Canada to hike rates remains high. BofA expects rates to hold steady unless inflation consistently breaches 3% for several months.

 

Sky Links Capital: Gold’s upside may be capped as Fed rate cut expectations cool. While geopolitical risks remain, strong U.S. labor data and potential diplomatic breakthroughs in the Middle East are pressuring the metal.

 

MUFG: Signs of life in the Strait of Hormuz? Analysts suggest tankers are testing new routes hugging the Omani coast. Additionally, Iran’s move to allow Iraqi oil exports through the strait could return 3 million bpd to the market, though the definition of "Iraqi oil" remains a critical unknown.