APAC Market Wrap - Apr 27

 

China Markets: The Shanghai Composite rose 0.16% and the Shenzhen Component gained 0.37%, while the Chinext Index slipped 0.52%.

 

The semiconductor supply chain saw a massive breakout and lithium battery stocks remained active. Conversely, the computing power leasing sector underperformed.

 

Hong Kong Markets: The three major indices showed mixed performance. The Hang Seng Index fell 0.20% to 25,925.65, and the H-Share Index dipped 0.22%.

 

However, the Hang Seng Tech Index rose 0.77% to 4,939.84. Market structure remained highly bifurcated: tech and growth sectors trended higher (specifically memory chips, semiconductors, and optical communications), while consumption and cyclical assets like tea-drinks and non-ferrous metals softened.

 

Japan: The Nikkei 225 surged 1.38% to 60,537.36. Electrical equipment, non-ferrous metals, and machinery led the gains.

 

South Korea: The KOSPI jumped 2.15% to 6,615.03. Defense, aerospace, and energy-chemicals led the advance, while large-cap tech and automotive stocks remained weak.

 

Australia: The S&P/ASX 200 fell 0.57% to 8,743.40. Semiconductors and furniture bucked the trend to the upside.

 

Singapore: The STI dropped 1.17% to 4,944.11. Forestry and oil-gas surged, while construction materials and industrial products retraced.

 

Malaysia: The FTSE KLCI gained 0.66% to 1,721.70. Energy and industrial products were the primary drivers.

Key Events

U.S. Budget Carriers Seek "Bailout" as Jet Fuel Prices Soar

 

Escalating oil prices triggered by the Iran conflict are devastating the balance sheets of U.S. low-cost carriers.

 

Reports suggest that Frontier Air and Avelo Air are seeking $2.5 billion in financial aid from the Trump administration. In exchange, the airlines are offering warrants convertible into equity. The request is based on the assumption that jet fuel will average over $4 per gallon for the remainder of the year.

 

Wedbush: 80-90% Probability of Tesla-SpaceX Merger by 2027

 

Renowned tech analyst Dan Ives predicts a massive consolidation of Elon Musk’s empire. Ives estimates an 80-90% chance that Tesla and SpaceX will merge by the first half of 2027. He believes that the anticipated SpaceX IPO this summer will serve as the financial foundation for this historic corporate integration.

 

Korean Retail Investors Target Global Semiconductors

 

South Korean retail investors, currently riding the "memory super-cycle," are aggressively expanding their reach.

 

Beyond domestic giants and U.S. big tech, investment in Chinese and Japanese chips has surged. Notable net buys include NAND giant Kioxia , with combined net purchases totaling approximately $55.14 million this month.

 

Trump Administration Nets $27B Paper Profit on Intel Surge

 

The U.S. government’s strategic 10% stake in Intel—acquired last August—has turned into a windfall.

 

Following a 28% surge in Intel's stock on Friday to a record high of $85.22, the government’s initial $8.9 billion investment is now worth $36 billion.

 

This reflects a paper profit of $27 billion, highlighting the success of the administration's "national security" investment mandate in critical tech and rare earth sectors.

Institutional Views

Goldman Sachs: Q4 Brent Forecast Raised to $90

 

Citing an unprecedented supply shock, Goldman raised its Q4 Brent forecast to $90/bbl and WTI to $83/bbl. The bank estimates that 14.5 million barrels per day (mb/d) are offline in the Middle East, leading to a record global inventory draw of 11-12 mb/d in April.

 

Citi: Oil Could Hit $150 if Hormuz Disruption Persists

 

Citi analysts warned that if the Strait of Hormuz remains blocked through June, Brent could spike to $150/bbl. The bank has pushed back its expectation for the reopening of the strait from mid-April to late May.

 

Barclays: Fed Likely to Hold Rates This Week

 

Barclays expects the Fed to remain patient this week due to high inflation and strong demand. However, they maintain that a rate cut remains possible around September if inflation cools. Markets currently price in only a 10-basis-point cut for 2026.

 

Baker Hughes: No Full Reopening of Hormuz Before H2

 

The CFO of Baker Hughes told investors that the conflict is expected to last through June, with the Strait of Hormuz unlikely to return to normal operations until the second half of the year. This view is echoed by a Dallas Fed survey, where 80% of energy executives expect the strait to remain closed until August or later.