OCBC Investment Research
Date of Report: 21 August 2025
Global Markets Pulse: Defensive Sectors Gain as Technology Faces Valuation Pressures – Key Stock Insights & STI Leaders

Market Overview: Rotation From Technology to Defensive Sectors

Global equity markets showed mixed signals as investors rotated away from technology and consumer discretionary stocks toward safer sectors like energy, healthcare, and consumer staples. This shift followed the release of recent Federal Reserve meeting minutes, emphasizing inflation risks over labor market concerns and suggesting that it was premature to begin cutting interest rates. The S&P 500 fell by 0.24%, and the Nasdaq Composite dropped 0.67%, although both indices recovered from earlier session lows. Meanwhile, the Dow Jones Industrial Average eked out a modest gain of 16.04 points (0.04%). Seven out of eleven S&P 500 sectors posted gains, highlighting a broad but cautious market sentiment.

Key U.S. Developments

• Tech sector under pressure amid high valuations and regulatory uncertainties.
• Potential government equity stakes in semiconductor firms like Intel, Nvidia, and AMD.
• Fed meeting minutes indicate no imminent rate cuts; inflation remains the central worry.
• President Trump called for the resignation of Fed Governor Lisa Cook, citing mortgage fraud allegations.
• Major retailer earnings in focus as tariffs threaten consumer sentiment.

European and Asian Market Highlights

• Stoxx Europe 600 Index rose 0.23%, led by defensive sectors such as food and beverage. UK’s FTSE 100 surged 1.1% to a record high.
• MSCI Asia Pacific Index declined 0.61%, with Taiwan, South Korea, and Japan seeing notable losses. Conversely, India and China equities advanced.

Singapore Market Snapshot

Trading volume fell sharply by 29.4%, and turnover was down 10.1%, indicating a cautious stance among market participants. The Straits Times Index traded within a 52-week range of 3,353.9 to 4,282.8, with 289 gainers versus 249 losers in the session.

Spotlight: Jiangxi Copper Co Ltd – Beneficiary of China’s “Anti-Involution” Campaign

Jiangxi Copper Co Ltd (358 HK / 600362 CH): Smelting Set for Positive Momentum

• Strong copper and gold prices underpin share price outperformance.
• Share price (H-share) up ~53% YTD, outperforming MSCI China Index (+26%).
• A-share up ~19% YTD, ahead of CSI 300 Index (+7%).
• Robust 1Q25 results and supply constraints continue to drive copper prices higher, with consensus forecasting USD 9,844/tonne in the next year.
• Internal estimate for gold prices: USD 3,900/oz over 12 months.

Jiangxi Copper stands out as a key beneficiary of China’s “anti-involution” campaign, which aims to address overcapacity and excessive competition, particularly in the copper smelting sector. These measures are expected to improve margins and restore sector balance, offering a positive outlook for the company. Additional growth is anticipated from ongoing green initiatives, manufacturing upgrades, and increased power grid-related demand.

ESG Assessment: Risks and Opportunities

• Classified as high-risk sector due to carbon emissions and intensity.
• Scope 1+2 GHG emissions (2.1-2.2mt FY2020-2022) below industry average.
• Efforts made to reduce emissions, but gaps remain in stakeholder engagement and land use targets.
• Community-related risks and reputational exposure due to exclusive China operations.
• ISO 14001 certification, but lacking policies on waste reduction and environmental performance-linked executive pay.
• Ongoing allegations of soil and river pollution from tailings discharge.

Recommendation: BUY

Other Key Stock Updates & Investment Ideas

STI Stocks Sorted by Market Capitalisation: Top 30 Players

Conclusion: Navigating Market Volatility With Sector Rotation and Stock Selection

With macroeconomic uncertainties, inflation risks, and sector-specific headwinds, investors are rebalancing portfolios away from high-valuation technology stocks and into defensive sectors. Key opportunities are emerging in companies poised to benefit from policy tailwinds, such as Jiangxi Copper, and Singapore’s market leaders with strong dividend yields and resilient earnings. ESG risks, especially in high-emission industries, remain a focal point for long-term investors. Active monitoring of policy, earnings, and market sentiment will be critical in the months ahead.

Important Disclosures and Ratings Guide

• OIR’s technical recommendations are short-term and trading-oriented.
• Fundamental ratings (Buy, Hold, Sell) are based on a 12-month horizon:
  • BUY: Total expected returns (excluding dividends) > 10%
  • HOLD: Returns between +10% and -5%
  • SELL: Returns < -5%
• For companies under S\$150m market cap, higher thresholds apply.