APAC Market Wrap - July 1

China A-Shares

• Shanghai Composite: +0.44% (4,112.45) | Shenzhen Component: -0.53% | ChiNext: -1.89%

• STAR 50: -2.48% due to heavy profit-taking in extended AI compute and semiconductor names.

• Turnover: Expanded to RMB 3.66T across Shanghai, Shenzhen, and Beijing, with 4,329 advancing issues.

• Summary: Sharp style rotation from high-beta tech to low-valuation cyclicals and small-caps, triggering severe index divergence.

Hong Kong Equity Market

• Market Closed.

Japanese Equity Market

• Nikkei 225: +0.59% (70,474.96)

• Summary: Logged a modest gain for July's opening session, trimming early morning highs on profit-taking; capped a first-half surge of nearly 40%. Chip weights like Tokyo Electron, Kioxia, and Advantest retraced late in the session. Long sentiment remains checked by persistent yen weakness.

South Korean Equity Market

• KOSPI: -2.04% (8,303.41)

• Summary: Witnessed wide intraday whiplash, diving from morning highs to endure a sharp technical pullback following prior gains (H1 cumulative gain remains above 100%). Heavyweights Samsung Electronics (-5.84%) and SK Hynix (-3.40%) dragged the index down on concentrated short-term profit-taking.

Australian Equity Market

• S&P/ASX 200: -0.60% (8,722.90)

• Summary: Precious metals and mining led the decline, tracking international commodity weakness. Capital decoupled from regional tech to seek refuge in defensive consumer assets and utilities.

Singapore Equity Market

• Straits Times Index: -0.73% (5,170.65)

• Summary: Real estate and mining lagged, while telecom and utility counters provided minor downside insulation. Capital continuously favored high-dividend, defensive utility assets.

Malaysian Equity Market

• FTSE Bursa Malaysia KLCI: -0.11% (1,664.06)

• Summary: Gold and non-ferrous resource equities pulled back in tandem. The broader tape remained sluggish, completely missing the regional semiconductor rebound theme amid thin trading volume.

Key Events

AI Growth Forces Fast-Tracking of South Korean Nuclear Power Capacity

• The News: Seoul is evaluating regulatory frameworks to compress the typical 9-to-10-year development lifecycle of nuclear power facilities.

• The Driver: Expanding baseload capacity is critical to meet the exponential, 24/7 power demands of massive localized data centers and semiconductor clusters. Nuclear infrastructure currently generates roughly one-third of South Korea's aggregate power supply.

South Korean Monthly Exports Breach $100 Billion Milestone for First Time

• The News: June trade data placed South Korea alongside China, the US, and Germany as only the fourth global economy to cross the $100B single-month export mark.

• The Driver: Outbound semiconductor shipments reached a record high, breaching $40B for the month, while the aggregate monthly trade surplus topped $30B.

Institutional Perspectives

1. Citi: Over 80% of Nasdaq Long Positions Stuck Underwater

• The Thesis: The team warns that US tech faces sustained downside risks. While the Nasdaq 100 gave up nearly 2% in June (its worst June since 2022), absolute institutional long exposure remains heavily crowded. Because roughly 80% of these active longs are currently out-of-the-money, the threat of forced long capitulation could trigger additional near-term selling pressure as capital migrates toward small-caps.

2. Citadel Securities: US Retail Dip-Buying Volumes Breach Record Highs

• The Thesis: Data reveals that US retail investors have been absorbing technical drawdowns at a record velocity over H1 2026. On days when the S&P 500 registers a negative close, retail buy orders surge to roughly 3.5 times their daily baseline average—marking the most aggressive dip-buying behavior recorded since data tracking began in 2020, even eclipsing the 2021 meme-stock boom.