Asia markets trade mixed, Bank of Japan nominee Ueda speaks; Japan’s inflation reaches 41-year high

Soegeefx AppsAsia MarketAsia markets trade mixed, Bank of Japan nominee Ueda speaks; Japan’s inflation reaches 41-year high

Jihye Lee & Lim Hui Jie

Asia-Pacific markets traded mixed on Friday as the nominee to lead the Bank of Japan Kazuo Ueda spoke at a confirmation hearing.

The Nikkei 225 rose 1.09%, and the Topix climbed 0.57%. Japan’s core inflation in January rose 4.2%, the highest since 1981.

In Australia, the S&P/ASX 200 rose 0.32%. South Korea’s Kospi fell fractionally, while the Kosdaq was down 0.35%.

Hong Kong’s Hang Seng index traded 1.62% down, and the Hang Seng Tech Index dropped 2.24%. In mainland China, the Shenzhen Component fell 0.84% and the Shanghai Composite was 0.63% lower.

.N225 Nikkei 225 Index *NIKKEI 27408.64 304.32 1.12
.HSI Hang Seng Index *HSI 20080.28 -271.07 -1.33
.AXJO S&P/ASX 200 *ASX 200 7311.3 25.9 0.36
.SSEC Shanghai *SHANGHAI 3264.58 -22.9 -0.7
.KS11 KOSPI Index *KOSPI 2433.47 -5.62 -0.23
.FTFCNBCA CNBC 100 ASIA IDX *CNBC 100 8141.95 -45.9 -0.56

In earnings, OCBC was among the three major Singapore banks that posted a record profit for 2022 alongside DBS and UOB. Singapore’s January manufacturing output figures are expected to rise at 2.9% compared to a year ago.

Overnight in the U.S., stocks closed higher amid volatile trading Thursday as investors remained concerned about the path of the Federal Reserve’s rate hikes.

Bank of Japan governor nominee Ueda says current strategy ‘appropriate’

Bank of Japan governor nominee Kazuo Ueda has expressed support for the current monetary policy, Reuters reported, citing his commentary at parliament.

Despite numerous side effects, the current strategy is “appropriate,” Ueda reportedly said, commenting on the central bank’s ultra-dovish monetary policy.

He added more time is needed to achieve the central bank’s inflation target and it aims to achieve price stability in a sustainable and stable manner.

— Jihye Lee

Singapore’s tech giant Grab tumbles 8.29% as cash burn persists

Shares of ride-hailing and food delivery giant Grab fell 8.29% in U.S. trade after the company released its latest earnings report on Thursday.

While the company has been cutting costs over the past quarters, cash burn was still substantial. Losses for the whole of 2022 came in at $1.7 billion. In 2021, losses amounted to $3.5 billion.

“We will continue to cut incentives and look at areas of discretionary spending, whether it is facilities, travel, entertainment or cloud costs,” said Peter Oey, chief financial officer of Grab, in a CNBC interview ahead of the earnings report.

Regional corporate costs for the fourth quarter of 2022 were $223 million, up from $192 million a year ago. The quarterly increase was driven mostly by higher direct marketing costs amidst the festive period, among other fees.

– Sheila Chiang

Alibaba’s Hong Kong shares slip over 3% despite better than expected earnings

Shares of Alibaba in Hong Kong fell 3.6% lower, despite reporting better-than-expected earnings for its fiscal third quarter.

For the quarter ending Dec. 31, Alibaba recorded 247.76 billion Chinese yuan in revenue ($35.92 billion), up 2% on an annualized basis and higher than the 245.18 billion yuan expected.

Most notably, net income came in at 46.82 billion yuan, 69% higher than the same period a year ago.

On Thursday, Alibaba CEO Daniel Zhang during a earnings call noted sales of online physical goods “remained weak” in January to early February of this year due to Covid-19 cases in China, according to FactSet transcript.

Still, Zhang said he expects recovery to pick up, saying “all of our merchants have also expressed their strong desire to get to business.”

— Lim Hui Jie, Arjun Kharpal, Evelyn Cheng

CNBC Pro: Asia tech is back, Bernstein says, naming Alibaba and 5 more top picks

Looking to cash in on the China reopening, while being mindful of a potential recession? Bernstein has a raft of tech stocks it says checks the boxes.

— Zavier Ong

Singapore bank OCBC posts record profit, full year dividend rises 28%

Singapore bank OCBC has posted a record full year net profit of $5.75 billion Singapore dollars ($4.28 billion), up 18% compared to 2021′s figure of S$4.86 billion.

This was because of “strong growth in net interest income and lower allowances,” the company said in its earnings release.

The bank’s net interest income grew 31% to a record S$7.69 billion compared to 2021, “underpinned by a 37 basis point expansion in net interest margin and 6% growth in average assets,” said the release.

Revenue for 2022 also increased 10% on an annualized basis to S$11.7 billion.

OCBC declared a dividend of 40 cents for the six months ending December, bringing its total dividend to 68 cents, 28% higher than the year before.

— Lim Hui Jie

Japan’s consumer price index rises 4.2% in January

Japan’s nationwide consumer price index rose 4.2% compared to a year ago in January, government data showed.

That reading was in line with expectations of economists surveyed by Reuters.

The economy’s core CPI excluding fresh food and energy prices rose 3.2%, data showed, as overall CPI rose 4.3% year on year.

— Jihye Lee

Stocks ended up on Thursday

The Dow Jones Industrial Average gained 111 points, or 0.3%.

Meanwhile, the S&P 500 and Nasdaq Composite rose 0.5% and 0.7%, respectively.

The major averages are still on pace to end the week on a downturn, with the S&P 500 on track for its worst weekly performance since Dec. 16.

— Hakyung Kim

CNBC Pro: Nvidia’s stock is soaring on the A.I. buzz. Here’s where Wall Street sees it going next

After a bad 2022 — along with most chip companies — U.S. giant Nvidia has seen a major turnaround, clawing back much of the losses it incurred.

Has the stock got further to go even with its big surge this year? Here’s what Wall Street analysts say about where they see it going next, and AI’s impact on the firm.

— Weizhen Tan

Keep an eye on the 3,900 S&P 500 level, chart analyst Katie Stockton says

Fairlead Strategies’ Katie Stockton said she’s closely watching the 3,900 level at the S&P 500, noting it’s in danger of being broken. “Unfortunately, the next support level is that 3,500 level that was tested back in October.”

The S&P 500 traded around 3,990 on Thursday, struggling to snap a four-day losing streak — its longest slide since December.

The broader market index has also given up a chunk of its January gains. It was last up about 4% for the year after popping more than 6% in January.

“That abrupt reversal shows a shift in market sentiment that, I think, is … going to be difficult to weather in the near term,” Stockton said on CNBC’s “Squawk Box.”

— Fred Imbert

Wavering in the markets looking to continue, according to BankRate

The back-and-forth rally in the markets is looking to continue in the near future, according to BankRate’s chief financial analyst Greg McBride.

“The market is rallied a couple of times under this false premise that the Federal Reserve is going to pivot and start cutting interest rates right. And time and time again, the Fed pushes back on that, and the market eventually gets the message, and we see a pullback. I don’t expect it to play out any differently this time,” said McBride. “The economy is the economy is remarkably strong. Inflation is still hot. The labor market was tight. And all of that argues for a fed that is going to continue raising interest rates.”

McBride added that currently, the markets are only pricing in a soft landing.

He added, “The market has not priced in the risk of recession. The market has not priced in the no landing scenario where the Fed has to continue raising interest rates because of elevated inflation and for the foreseeable future.”

— Hakyung Kim

2023 is a more micro-driven market, according to Goldman Sachs

The market has shifted this year, according to Goldman Sachs’ trading desk, presenting opportunities for investors.

“Fears of recession and elevated interest rate volatility helped create a particularly macro-driven market for much of 2022,” according to a Wednesday note from the firm’s trading desk.

“But 2023 is shaping up to be a much more micro-driven market, presenting an opportunity for fundamental stock pickers and alpha generation as we move further and further into the post-pandemic, post-modern cycle.” 

The note highlighted the “importance of margins (over revenues) amidst higher interest rates, more expensive input costs (like commodities and labor), and high inflation.” 

— Hakyung Kim

Source : cnbc

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