Eastspring's Wai Mei Wong identifies investment opportunities in Asian markets, particularly favoring Korea and Taiwan in the short term for their overall "hardware place" strengths. She also points to "China hardware tech names" as areas of interest for bottom-up stock picking. Despite recent underperformance, Wong sees opportunities within the China A-share space.
Wong notes that Indian domestic plays have been significant laggards in both 2025 and so far in 2026, presenting potential attractive entry points due to their subdued valuations. She indicates a close watch on these areas for emerging opportunities, suggesting that volatility can reveal value.
The broader Asian market is experiencing a rout driven by anxieties over AI valuations, increased competition, and elevated spending ahead of key tech earnings and a US Federal Reserve policy decision. South Korea's KOSPI fell 5% and shares of SK Hynix, despite a more than sixfold increase in quarterly operating profit, dropped 9% as the company missed high expectations. The MSCI's broadest index of Asia-Pacific shares outside Japan slipped 1%, bracing for an 8% monthly drop.
Investors are particularly scrutinizing earnings from "Magnificent Seven" members like Microsoft and Meta, especially after Alphabet and Tesla reported negative cash flow. Analysts like Gary Tan of Allspring Global Investments suggest that in the current AI market, "strong is no longer enough," and investors are seeking additional catalysts beyond just robust earnings, such as long-term agreements and shareholder returns.
Amidst this volatility, the Federal Reserve's policy decision is also a significant factor, with a potential rate hike in July being a "close call" according to Frank Flight of Citadel Securities, who believes the market might be underestimating the Fed's hawkish stance, potentially tipped by rising energy prices.
