APAC Market Wrap - Apr 9

China A Shares: At the close, the Shanghai Composite fell 0.72%, the Shenzhen Component dropped 0.33%, and the ChiNext Index declined 0.73%.

Semiconductor equipment was active, fiber optic concepts rose sharply, and CPO concepts strengthened again.

 

Hong Kong Stocks: Hong Kong’s three major indices failed to extend the previous session’s gains, with the tech index leading losses.Hang Seng Index: -0.54% to 25,752.40. Hang Seng Tech Index: -2.06% to 4,821.67

Hang Seng China Enterprises Index: -0.75% to 8,611.83. Optical communications, pharmaceuticals, and power equipment outperformed; memory chips and gold stocks retreated.

 

Japan: Nikkei 225: -0.73% to 55,895.32. Non-ferrous metals, shipping, and mining edged up; air transport, retail, and real estate slumped.

 

South Korea: KOSPI: -1.61% to 5,778.01. Wireless communications, department stores, and cosmetics rose; autos, insurance, and semiconductors mildly lower.

 

Australia: S&P/ASX 200 (.XJO): +0.24% to 8,973.200. Oil & gas, industrials, and utilities gained; software, credit, and media declined.

 

Singapore: Straits Times Index (.STI): -0.38% to 4,977.08. Consumer services, forestry, and medical devices firmed; cyclical retail, software, and education edged down.

 

Malaysia: FTSE Malaysia KLCI: -0.59% to 1,686.24. Energy, plantations, and construction rose; financials, tech, and consumer sectors fell across the board.

Key Events

Japan considers extra oil reserve release in May as Hormuz stalemate drags on

 

With the Iran conflict entering its 40th day, Japan’s economy has taken a heavy hit, with March consumer confidence worsening at the fastest pace since the 2020 pandemic.

 

Facing severe crude supply shortages, the Japanese government is weighing another release of oil reserves to stabilize markets.

 

Officials cited by local media said with the outlook for safe navigation in the Strait of Hormuz unclear, Japan may release around 20 days’ worth of oil reserves as early as May.

 

EU sticks to Russian gas sanctions; Russia diverts to Asia at steep discounts

 

The U.S.-Iran conflict has tightened global energy supplies, making Russian oil and gas a critical alternative. Yet under EU sanctions, Russian gas is set to exit Europe within weeks.

 

Russia is now scrambling for new buyers. President Putin said last month that with the EU refusing new short-term LNG deals from April 25 and planning a full ban on pipeline gas by late 2027, Russia will redirect gas flows away from Europe.

 

Sources say Russian gas is being targeted at South Asia, with little-known intermediaries offering supplies at a 40% discount to spot prices last week. It remains unclear if any buyers took the sanctioned gas.

 

The U.S. temporarily eased sanctions on Russian oil in early March to allow in-transit cargoes to trade, but the exemption did not cover natural gas — leaving buyers at risk of U.S. penalties.

 

Middle East conflict stokes global food inflation; top institutions warn of price hikes

 

The World Bank, IMF, and UN World Food Programme warned Wednesday that surging oil, gas, and fertilizer prices driven by the Middle East war will inevitably push up food prices and worsen food insecurity.

 

In a joint statement after a conflict-focused meeting, heads of the three institutions said the heaviest burden will fall on the world’s most vulnerable, especially people in low-income, import-dependent economies.

Institutional Views

Tech stocks, including U.S. names, look inexpensive after prolonged underperformance, creating a potential entry point for investors.

 

“We’ve seen one of the weakest relative returns for tech in 50 years (so far this year).”

 

Multiple headwinds since 2025 — including DeepSeek launches, massive capex by U.S. megacaps, and AI-driven disruption in software — have pushed investors toward value stocks.

 

Megacap tech’s valuation premium has shrunk to near parity with the broader sector. Globally, the IT sector trades at a lower P/E than consumer discretionary, staples, and industrials.

 

Even with low valuations, earnings remain strong: S&P 500 IT sector Q1 EPS is expected to surge 44%, accounting for 87% of the index’s total EPS growth.

 

The U.S. Energy Information Administration said Tuesday that oil prices could keep climbing in the months ahead even if the Strait of Hormuz reopens.

 

It now sees Brent crude averaging $96/bbl in 2026, up from a prior $78.84 forecast, with retail gasoline and diesel prices set to rise further.

 

Even after the conflict ends, restoring full oil flows through the strait could take months, keeping prices elevated until supply normalizes.

 

“Just as we have never seen the strait closed, we have never seen it reopen. We will maintain a risk premium in crude prices throughout the forecast period, as supply uncertainty keeps prices above pre-conflict levels.”

 

Strategists said the dollar’s recent strength amid Iran-driven energy shocks is less sustainable than in 2022.

 

Back then, the USD rose steadily on the Russia-Ukraine war and kept gaining even after oil fell, supported by a stronger U.S. economy and Fed hiking cycle.

 

TD Securities expects the Fed to resume rate cuts in Q3 2026 if inflation cools, forecasting a weaker dollar by year-end.