Asia-Pacific markets rise after Wall Street sees bank stocks rebound

Kevin Heal, fixed income strategist and senior analyst at Argus Research, says the Fed will continue to raise interest rates despite U.S. inflation being lower in February than in January. expected to do.

The US consumer price index was 0.4% in February, slightly below January’s 0.5%.

Heal told CNBC’s “Street Signs Asia” that despite the low numbers, “it’s important to note that inflation isn’t going down, it’s not rising as quickly as it used to.” pointing out.

He believes that while the market may see some “lower inflation numbers” in the second half of 2023, inflation will still rise, and as such, “unless another unrelated event occurs in the banking system, the federal The Reserve Board expects to remain on track for higher interest rates.”

— Lim Hijie

Shares of Shenzhen-listed Hyundai Amperex Technology (CATL) fell slightly after Reuters reported that it had postponed its planned $5 billion listing in Switzerland.

Reuters reports that there has been a delay in expected approval from Chinese regulators after Chinese President Xi Jinping expressed mixed feelings about the status of its role in the emerging electric vehicle industry. bottom.

Hong Kong’s Hang Seng Index rose 2.35% on Wednesday to lead the Asia Pacific gains, supported by healthcare and technology stocks.

Top performers in the index included search engine company Baidu, which rose 6.28%, Alibaba health information technology, which rose 5.59%, and Internet company Netease, which rose 4.02%.

However, the biggest gainer in HSI was Orient Overseas (International), up 9.49%. The company is the parent company of container shipping company Orient Overseas Container Line.

— Lim Hijie

UBS cites the number of Chinese stocks that have remained “resilient” during a period of heightened geopolitical tensions between the US and China.

In a March 13 memo to clients, Swiss Bank said it expected market volatility to rise after the US announced a possible ban on investments in some sectors of China.

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— Ganesh Rao

Bank stocks in Singapore and South Korea rose across the board on Wednesday morning, following a rally in Wall Street overnight.

In Singapore, OCBC Bank rose 2.24%, leading the rise among the country’s three major banks, while UOB and DBS rose 2.08% and 1.64% respectively.

South Korean financial stocks rose slightly more, with KB Kookmin Bank, Shinhan Financial and Woori Financial gaining 2.69%, 1.71% and 2.79% respectively.

— Lim Hijie

According to official data, China’s industrial output increased by 2.4% from January to February.

Retail sales for the same period increased by 3.55%, as expected.

China’s fixed asset investment rose 5.5% in the first two months of the year, beating expectations of economists polled by Reuters who are expected to grow 4.4%.

China’s onshore renminbi fell after the data was released, trading at 6.8822 against the US dollar.

The People’s Bank of China kept the interest rate on its 481 billion yuan one-year medium-term loan facility unchanged at 2.75%.

The minutes of the Bank of Japan’s policy meeting in January show member countries repeatedly expressing the need to maintain an ultra-dovish stance.

“The Bank of Japan acknowledged the need to continue monetary easing, that its accommodative monetary policy stance has not changed, and that it will take time to sustainably and stably achieve its 2% price stability target. It needs to be explained carefully.” A member was quoted.

The minutes of the meeting also indicated that board members expected further recovery of the Japanese economy.

“Some members expressed the view that the economy was picking up led by domestic demand, specifically that the recovery in demand for services and the virtuous cycle in the corporate sector were the driving force.”

Yields on 10-year Japanese government bonds plummeted past the upper end of the acceptable range last Thursday, rising slightly to 0.296% after marking 0.276% on Tuesday.

– Lee Ji Hye

Japanese financials rose in Wednesday morning trading, reversing the direction seen earlier in the week and receiving a rally from Wall Street banks.

Tokyo-listed shares of Mitsubishi UFJ Financial Group rose 3.25%, Sumitomo Mitsui Financial Group rose 2.73% and Mizuho Financial Group also rose 2.04%. Nomura Holdings also rose 1.7%.

Meanwhile, technology giant SoftBank Group continued to post marginal losses of 0.62%.

Korea’s February seasonally adjusted unemployment rate fell a little It fell to 2.6% from 2.9% in January.

This was also down from 2.8% in the same period last year.

The total number of unemployed was 743,000, down from 842,000 in January and 797,000 in February 2022.

— Lim Hijie

The failure of US-based Silicon Valley Bank is unlikely to affect the Southeast Asian startups it raises, the venture capital firm told CNBC.

“In my opinion [the impact on fundraising is] Please be careful. But I don’t think the contagion will spread,” David Gowdey, his partner managing his venture capital firm Jungle Ventures in Southeast Asia, told CNBC’s “Squawk Box Asia” on Tuesday.

He added that “the money in Southeast Asia is well capitalized” and that “there is a lot of capital to deploy.”

Vinnie Lauria, managing partner of Golden Gate Ventures, said it’s now “time to shine” in Southeast Asia.

“[Southeast Asia] Now it looks like a golden child for U.S. investors,” Lauria said on CNBC’s “Street Signs Asia” on Tuesday.

“Investors are starting to say they want to diversify across different bank accounts, different regions and different currencies.”

— Sheila Chen

Moody’s Investors Service on Monday changed its view on the US banking system from stable to negative, citing a “rapidly deteriorating business environment.”

The move comes amid turmoil in the sector following the shutdowns of Silicon Valley Bank and Signature Bank. Bank stocks rebounded Tuesday after sliding in the past few sessions as concerns swirled about contagion from shutdowns.

“Deposit executions at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and SVB and SNY,” Moody’s said in a report.

— Alex Harring, Jeff Cox

Markets have had a volatile March so far as inflation fears resurfaced and investors went into risk-off mode with the failure of the Silicon Valley Bank.

Against this backdrop, CNBC Pro used FactSet to select stocks in the MSCI World Index and S&P 500 that are well positioned to withstand volatility and are expected to do well going forward.

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— Tan Weizhen

There is speculation that the Fed may delay rate hikes due to recent bank failures, but market pricing suggests the central bank is still on track.

The consumer price index data released Tuesday morning are in line with market expectations and show that the Fed still has more work to do to keep inflation down.

Traders had priced in an 86.4% chance of a 25 basis points (0.25 percentage point) rise from the morning level at next week’s Federal Open Market Committee meeting. In addition, the implied level of peak or terminal rates rose to just under 5%, according to CME Group data.

But there have also been rumors that the Fed should take a more cautious approach, given the failures of Silicon Valley and Signature banks.

“To be clear, we don’t think further rate hikes are necessary now. So far reluctant to accept this argument, until last week they were showing up to raise rates further,” writes Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“Recent events have strongly argued for a pause until May, but at this point, that’s not our base scenario and we’re pleasantly surprised.

— Jeff Cox

Worried about contagion from the failure of Silicon Valley Bank?

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— Xavier Ong

The financials sector in the S&P 500 rose more than 2% to lead the broader market, boosted by regional bank names that plunged in the previous session. After 10 a.m. ET, the sector was on its biggest one-day gain since Nov. 10, when it surged 5.1%.

Communications services and energy also grew by more than 2%, along with technology.

— Fred Imbert

The February consumer price index rose 0.4% from the previous month, in line with Dow Jones estimates. The 6% year-on-year increase was also expected.

— Fred Imbert