Jihye Lee & Lim Hui Jie
Asia-Pacific markets were mostly higher on Tuesday as investors digested key economic data across the region.
The Hang Seng index fell 0.69% as Hong Kong’s Chief Executive John Lee announced to drop its mask mandate starting March 1. The Hang Seng Tech index meanwhile, fell 1.42%.
In mainland China, the Shenzhen Component climbed 0.7% to close at 11,783.8, leading gains among the benchmark indexes, while the Shanghai Composite was 0.66% higher to end the day at 3,279.6.
South Korea’s Kospi gained 0.42% to close at 2,412.85, while the Kosdaq rose 1.45% to finish at 791.6 as battery material maker L&F stocks jumped after winning a contract with Tesla.
The Nikkei 225 rose fractionally to close at 27,445.56 and the Topix ended Tuesday marginally higher at 1,993.28 as Japan saw its worst decline in factory output in eight months, recording a 4.6% drop in January compared to December.
|.N225||Nikkei 225 Index||*NIKKEI||27379.74||-65.82||-0.24|
|.HSI||Hang Seng Index||*HSI||19785.94||0||0|
|.AXJO||S&P/ASX 200||*ASX 200||7226||-32.4||-0.45|
|.FTFCNBCA||CNBC 100 ASIA IDX||*CNBC 100||7990.45||-6.35||-0.08|
In Australia, the S&P/ASX 200 rose 0.47% to close at 7,258.4 as retail sales for January came in higher than expected at 1.9% compared to December, higher than expectations of a 1.5% rise.
India will release its gross domestic product for the fourth quarter of 2022 later today, forecasted to show a 4.6% rise.
Overnight in the US, stocks rose on Monday night as traders tried to recover some ground following the worst week of the year on Wall Street. All three major US indexes closed higher, with the Nasdaq Composite leading gains.
— CNBC’s Tanaya Macheel contributed to this report
Iron ore prices to shed about $10 per ton from where they are currently, says Celsius Pro
Iron ore prices are set to trade at $115 to $110 per ton, Jonathan Barratt, CEO of Celsius Pro forecast told CNBC.
“I think the key moment that we’re focusing on is what the Chinese regulatory authorities are doing at the ports in terms of price regulation… and the fact that they really don’t want to see too much [iron ore] inventory at the ports,” he said, saying that what could result from that is a drop from 160 million tons of iron ore inventory down to 120 million tons.
In a recent response to rising iron ore prices in China, the National Development and Reform Commission (NDRC) released a statement that regulations and crackdown on illegal activities will be implemented to strengthen the supervision of iron ore market prices.
“As a result of that, we can see a significant fall back in that inventory build in Chinese ports… that’s going to sort of put a flavor of less demand into the equation,” said Barratt.
The benchmark 62%-grade iron ore last traded at $125.74 per ton.
—Lee Ying Shan
Electricity demand in Hong Kong grows as the city adopts more EVs, says CLP
Electricity demand in Hong Kong is growing as the city focuses on moving forward after the pandemic, said Richard Lancaster, CEO of utilities firm CLP.
“The pattern of usages has been all over the place in the last three years … But the overall trend is that there is a growing demand for electricity,” Lancaster said.
As Hong Kong aims to achieve zero carbon emissions in its transportation sector before 2050, an increase in electricity usage is also a result of more electric vehicles on the road, said the CEO.
Lancaster said the company is “supporting the use of electricity in electric vehicles as a replacement for fossil fuels,” adding that it is also supporting charging infrastructures so drivers are able to adopt EVs efficiently and conveniently.
— Charmaine Jacob
Tesla faces tough price competition from Chinese EV brands with cost advantage: Consultancy
Tesla needs to lower its prices to compete with Chinese electric vehicle makers which have a cost advantage, according to an investment advisory firm.
Chinese battery maker CATL reportedly offered to sell its batteries to Chinese automakers at a discount, as Reuters reported.
“China, in particular, is a very hyper competitive market. CATL has over 30% of the battery supply chain locked in already. With that kind of scale, they can leverage that with pricing advantage,” said Bill Russo, founder and CEO of Automobility Limited, on CNBC’s “Squawk Box Asia” Tuesday.
He added that Tesla “lacks that product range and portfolio that is bringing traffic into the showroom.”
“If you are Tesla, you cannot be selling older models against fresh competition. So its new model has to come in at a low price point in order to create the showroom buzz and to be price competitive in China,” said Russo.
– Sheila Chiang
Amundi likes China A-shares, but ‘not the very big names’
Despite China’s reopening, investors should still be selective when looking at China stocks, according to Amundi chief investment officer Vincent Mortier.
Speaking to CNBC’s “Squawk Box Asia,” Mortier said he likes A-shares in China, but not very large names.
He highlighted “innovative players” in areas like the health-care and semiconductor sectors, adding that “there is value to be found, but you need to dig a bit further.”
As for the Chinese real estate sector, Mortier thinks there are still opportunities, pointing out that “there have been names which are very cheap for good reason [or have] been hammered too much. So if you select the good names, you can make very good returns. But you need to swallow volatility and the risks.”
— Lim Hui Jie
South Korean battery materials maker shares jump after winning Tesla order
Shares of South Korean battery materials maker L&F jumped more than 15%, after it announced winning a nearly $3 billion order from Tesla.
The company said in a filing that it has won a $2.91 billion contract to provide high-nickel cathode materials to Tesla starting January 1, 2024 to December 31, 2025.
Shares of L&F last traded 10% higher on Tuesday, hovering at its highest levels since May 2022.
– Jihye Lee
Hong Kong to end mask mandate from March 1
Hong Kong will end its mask mandate for indoors and outdoors on Wednesday, March 1 – its Chief Executive John Lee said in a briefing.
When asked for the reasoning behind the timing, Lee cited “overall assessment” and emphasized that the government had previously said it would be closely monitoring the situation.
Mask rules for hospitals and nursing homes will be “added administratively,” Lee said.
– Jihye Lee
Bank of Japan official reiterates support for 2% inflation target
Bank of Japan’s deputy governor Masazumi Wakatabe reiterated his support for the central bank’s inflation target of 2%, according to a transcript of his speech delivered at Columbia University.
“The very idea of having a clearly defined inflation target is based on the importance of communication,” he said in his speech.
“Communication with the general public is particularly important since their perception plays a key role in anchoring inflation expectations, and thus, affects the actual evolution of inflation,” he said, adding the central bank’s “sustainable monetary easing” brought a positive effect on the real economy.
– Jihye Lee
SM Entertainment announces plans to change shareholder return policy
South Korean entertainment company SM Entertainment announced an enhanced shareholder return policy ahead of its annual general meeting in March, according to a Monday filing.
The company plans to expand its shareholder return targets to at least 30% of its separated net income from 20%.
The move is seen as part of wider efforts to keep small investors that own just over 70% of shares in SM.
Rival K-pop agency Hybe became the largest shareholder of SM after purchasing a 14.8% stake from Lee earlier this month, while Kakao bought a 9.05% stake.
Shares of SM Entertainment rose 0.25% on Tuesday, Hybe gained nearly 3% and Kakao inched up 0.32%.
– Lim Hui Jie
Japan retail sales jump 6.3% in January, beating expectations
Japan’s retail sales surged 6.3% for January compared to the same period last year, beating economists expectations of 4%.
Government data showed commercial sales in January 2023 totaled 45.7 trillion yen ($335 billion), a 3.2% increase over the same month last year.
Wholesale sales were 32.7 billion yen, up 2% compared to last year, while retail sales increased by 6.3% to 13 trillion yen.
–Lim Hui Jie
Japan industrial production falls more than expected, worst in eight months
Japan’s industrial production fell 4.6% compared to a month ago in January, the biggest decline the economy has seen in eight months, according to Japan’s Ministry of Economy, Trade and Industry.
The reading fell further than expectations of a 2.9% decline and follows a rise of 0.3% in the previous month.
Autos, semiconductor-making equipment, tech parts and devices led the decline overall. Shipments moderately fell and leaving inventories lower for the second straight month.
Core capital goods saw sharp falls, the release said.
– Jihye Lee
CNBC Pro: Semiconductors, A.I. and more: These top-rated ETFs offer a way to play tech’s hottest trends
Two tech themes have taken Wall Street by storm so far this year.
One is the return of semiconductor stocks, as demand bounces back for chips; the other is artificial intelligence, following the buzz surrounding chatbot ChatGPT.
CNBC Pro screened for the highest-rated ETFs with exposure to semiconductor and/or AI-related stocks (among others) using Morningstar data. The resulting funds all received a four- or five-star rating by Morningstar, and have performed well over the past three years.
— Weizhen Tan
CNBC Pro: ‘Pretty bearish on Tesla’: Market pro says price cuts will hit the EV giant’s share price
Tesla shares are unlikely to make a comeback in part due to the price cuts the EV maker announced late last year, according to veteran investor Mark Hawtin.
GAM Investments’ Hawtin also told CNBC’s Pro Talks that he thinks the automaker’s stock is unlikely to rise back to $300 in the medium term.
— Ganesh Rao
China releases draft plan to improve lending for renting property
The People’s Bank of China and the China Banking and Insurance Regulatory Commission released a draft of measures to enhance financial institutions’ capacity in lending to firms that lease residential properties.
The measures are aimed at broadening bond financing channels for rental housing firms, support issuance of operating loans for leasing, and strengthen credit support for construction of rental housing, the draft showed.
— Jihye Lee
Interest rates are driving the recent stock market performance, chart analysts say
Investors wondering what’s pushing equity market moves should look at interest rates.
Chart analysts say last week’s sell-off can be tied with the advances in bond yields. The three major stock market indexes posted their worst weeks of the year last week.
“The recent reset by the equity market feels more of a byproduct of rates higher, rather than a [simple] reset out of overbought territory for stocks,” said JC O’Hara, chief market technician at Roth MKM, in a note to clients Sunday.
“Overall, we believe this pullback has been orderly for stocks,” he added in his note. “However higher rates are becoming a large factor once again.”
And analysts said fixed income moves could be a driver of the stock market going forward.
The bear market could resume in March, says Morgan Stanley’s Wilson
The stock market’s recent attempt to pull out of a downtrend could soon come to an end, according to Morgan Stanley.
Mike Wilson, the firm’s chief U.S. equity strategist, said in a note to clients Monday that the S&P 500 is on the verge of falling back into a bear market.
“With the equity market showing signs of exhaustion after the last Fed meeting, the S&P 500 is at critical technical support. Given our view on earnings, March is a high risk month for the bear market to resume,” Wilson said.
—Jesse Pound, Tanaya Macheel
2-year yield reached highest level since 2007
The 2-year yield added to its February gains Monday, reaching 4.8% on the day. That’s its highest level since July 2007. Short-term rates have been moving higher this month as traders fret over the possibility of tighter monetary policy for longer than anticipated.
— Fred Imbert
Source : cnbc