APAC Market Wrap - Jul 21

China A-Shares

At close, the Shanghai Composite Index rose 1.79% to 3,864.37 points; the Shenzhen Component Index surged 4.81% to 14,264.00 points; the ChiNext Index powered up 7.05% to 3,685.00 points, and the STAR 50 Index soared 10.80%, booking its largest single-day gain since October 2024.

 

By sector, semiconductors led the advance, with the CSI 300 chip sub-index jumping 12.2%; computing hardware, memory chips, AI applications, photovoltaics, and consumer electronics bounced strongly across the board, while defensive sectors like power and utilities trailed the broader tech rally.

Hong Kong Equities

At close, the Hang Seng Index edged down 0.04% (10 points) to 25,132.29 points; the Hang Seng Tech Index gained 1.32% to 4,814.83 points.

 

The main benchmark traded in a narrow range around flat throughout the day, while tech shares drew support from the sharp rebound in mainland semiconductor names.

 

By sector, chipmakers and select tech hardware counters outperformed, while internet platforms, real estate, and financials traded mixed to modestly lower.

Japan

The Nikkei 225 closed up 3.26% at 66,232.19 points.

 

The index opened firmer and extended gains throughout the session, rising over 2,000 points as buyers stepped back into tech heavyweights.

 

Semiconductors and tech export sectors led the broad recovery following the previous session's selloff, supported by stabilizing offshore sentiment across the Asian technology supply chain.

South Korea

The KOSPI rebounded 3.56% to close at 6,747.95 points.

 

The market erased early weakness as panic surrounding the unwinding of leveraged ETFs began to ease, allowing foreign and institutional investors to hunt for bargains among key technology heavyweights.

Australia

The S&P/ASX 200 edged up 0.02% to 8,793.30 points.

 

The market hovered near flat through the session, as gains in tech and select defensive names were offset by modest pullbacks in energy and banking counters.

Singapore

The Straits Times Index (STI) rose 0.52% to 5,527.42 points.

 

Singapore equities advanced above the 5,500 mark as financial heavyweights and exchange operator SGX extended gains. Financials and industrial blue-chips provided solid underlying support.

Malaysia

The FTSE Bursa Malaysia KLCI eased 0.11% to 1,720.37 points.

 

The benchmark drifted slightly lower amid profit-taking, bucking the broader regional tech rally as pullbacks in plantation majors and Petronas-linked stocks weighed on the index.

Key Events

New Zealand Q2 Headline Inflation Eases to 3.9%, Softening Rate Hike Expectations

 

New Zealand’s second-quarter consumer price index came in at 3.9% year-on-year, undershooting the Reserve Bank of New Zealand's (RBNZ) prior forecast of 4.3% as global energy price shocks cooled.

 

While underlying core inflation remains persistent, the lower headline figure has led swap markets to dial back expectations for aggressive further rate hikes following the RBNZ's earlier move to 2.50%.

 

South Korea ETF Liquidation Panic Subsides as Capital Re-enters Tech Sector

 

South Korean financial markets saw a swift stabilization after liquidations tied to leveraged ETFs triggered sharp volatility in prior sessions.

 

Institutional and foreign inflows resumed, helping lift the KOSPI over 3.5% as buyers returned to semiconductor leaders like Samsung Electronics and SK Hynix.

 

India's Sensex Consolidates Ahead of Key Corporate Earnings Cycle

 

India’s BSE Sensex dipped 0.26% to 77,506 points as market participants locked in profits in auto and healthcare counters. Investors maintained a cautious stance ahead of major Q1 FY27 earnings releases and ongoing global commodity price fluctuations.

Institutional Views

UBS: Remains Constructive on China Tech; AI Still Key Driver for H2

 

UBS Wealth Management continues to favor China's technology sector, supported by new breakthroughs, accelerating AI adoption, improving fundamentals, and domestic policy support.

 

The firm believes valuations remain reasonable with strong earnings growth expected, and sees AI as the primary engine for further market upside in the second half.

 

JPMorgan: Overweight Emerging Market Equities; Likes Japan on Reflation Theme

 

JPMorgan Asset Management maintains a positive view on risk assets and is moderately constructive on equities, particularly in the U.S. and emerging markets where earnings momentum is strongest.

 

Across the Pacific, the firm favors emerging markets where AI capex should feed earnings at cheaper valuations, and continues to like Japanese equities on expectations of reflation and corporate governance reform.