OCBC Investment Research – Market Pulse (24 Mar 2025)

US Equities Struggle to Regain Momentum Amid Economic Concerns

The US equity market saw mixed performance last week, with the Dow Jones Industrial Average and S&P 500 edging up 0.08% and 0.5% respectively, while the Nasdaq Composite gained 0.52%. Despite the modest gains, investors remain concerned about slowing economic growth, trade tariffs, and the prospect of fewer Federal Reserve rate cuts this year.

Bellwether Stocks Disappoint

The rise in the major indices came despite gloomy earnings reports from several economic bellwether stocks. FedEx shares slid 6.5% after the logistics group lowered its earnings forecasts, citing “weakness and uncertainty in the US industrial economy”. Nike dropped 5.5% after warning of declining sales, citing tariffs and falling consumer confidence. Homebuilder Lennar Corp fell 4% as its margin guidance fell short of expectations, underscoring the challenges in the US housing market.

Tech Shares Under Pressure

US equities have struggled to regain momentum this year as investors have pivoted towards defensive stocks, seeking protection against the cloudy outlook for the US economy. Tech shares, in particular, have come under pressure as investors move away from riskier growth plays.
Tariff anxiety is also expected to cap upside in the near term, with President Trump dubbing the April 2nd deadline as a “liberation day” as he seeks reciprocal tariffs as retribution for barriers from other countries.

European Stocks Dip on Trade and Economic Concerns

The Stoxx Europe 600 Index fell 0.60%, as sentiment remained fragile over trade tariffs and the state of the economy. Trump has threatened to impose a 200% tariff on wine, champagne, and other alcoholic beverages from the European Union. European Central Bank President Christine Lagarde also expressed concerns that US tariffs could hit growth in the region.
Despite the current dip, the Stoxx Europe 600 Index is set for its best first quarter since 2019. Meanwhile, German lawmakers approved measures to unlock hundreds of billions of euros in debt-financed defense and infrastructure spending, with the DAX Index trading near a record high.

Asia-Pacific Shares Decline

The MSCI Asia Pacific Index declined as much as 0.7%, with Alibaba and TSMC among the biggest drags. A selloff in Chinese shares extended amid a lack of catalysts, while Hong Kong posted its biggest two-day drop since October as traders digested earnings and awaited further policy catalysts.

Singapore Market Update

The Straits Times Index (STI) edged down 0.1% on Friday, ending the week 1.2% higher. The FTSE ST Financials and FTSE ST REITs indices also saw minor changes, up 0.2% and down 0.1% respectively.

Global Market Performance

The S&P 500 and Dow Jones Industrial Average both edged up 0.1%, while the Nasdaq Composite gained 0.5%. In Europe, the FTSE 100 and STOXX Europe 600 declined 0.6%. Major Asian indices, including the Nikkei 225, Hang Seng, and Shanghai Composite, also closed lower.

FX and Commodities

The US dollar weakened against the Singapore dollar, Japanese yen, and Chinese yuan. Oil prices were largely flat, with WTI Crude at $68.28 per barrel and Brent at $72.16 per barrel. Gold and silver prices declined 0.7% and 1.7% respectively.

Research Highlights

OCBC Investment Research provided analysis on several key stocks:

ST Engineering Ltd (STE SP) – Scarcity Play in the Region as a Defense Proxy

– Outperformed the market with 41% year-to-date total returns – Announced increased FY25 dividend and new dividend policy – Refreshed five-year targets on revenue and net profit – Continues to secure new contracts, with \$8.6 billion expected to be delivered in 2025

BYD Co Ltd (1211 HK / 002594 CH) – Unveils Superfast Charging Solutions

– Delivered 59% year-to-date total returns, outperforming the Hang Seng Index and CSI 300 Index – Launched a super-charging platform with 1,000kW technology, enabling 5-minute charging for 400km range – Steadfast focus on innovation allows the company to compete on features rather than just price

Ping An Insurance (2318 HK / 601318 CH) – Commendable Performance with Continued Growth in Dividends

– FY24 operating profit and profit after tax rose 9.1% and 47.8% year-on-year respectively – Declared FY24 dividend per share of CNY2.55, representing 4.9% growth – New business value jumped 28.8% year-on-year on a like-for-like basis

Xiaomi Corp (1810 HK) – Positive Momentum into 2025

– Reported robust electric vehicle business growth with narrowing losses in Q4 2024 – Driving overseas growth opportunities for Internet of Things (IoT) segment – Accelerating investment in artificial intelligence (AI)