Asia-Pacific markets edge higher after Wall Street sees bank shares jump

Shenzhen-listed shares of Contemporary Amperex Technology (CATL) declined slightly after Reuters reported a delayed $5 billion listing plan by the battery giant in Switzerland, citing people with knowledge of the matter.

Reuters reported that the expected approval from Chinese regulators had been delayed, and comes after Chinese President Xi Jinping expressed mixed feelings about the status of its role in the growing electric vehicle industry.

UBS named several Chinese stocks that it says remained “resilient” during a period of heightened geopolitical tensions between the United States and China.

In a note to clients on March 13, the Swiss bank said it expected more volatility in the market when possible US restrictions on investment in certain Chinese sectors were announced.

CNBC Pro subscribers can read more about UBS’s stock picks here.

Ganesh Rao

Bank stocks in Singapore and South Korea rose across the board on Wednesday morning following gains by banks on Wall Street.

In Singapore, OCBC Bank led the country’s three major banks with gains of 2.24%, while UOB and DBS saw gains of 2.08% and 1.64% respectively.

Slightly bigger gains were seen in South Korean financials, with KB Kookmin Bank, Shinhan Financial and Woori Financial climbing 2.69%, 1.71% and 2.79% respectively.

– Lim Hui Ji

Official data showed that China’s industrial production grew by 2.4% in the January to February period.

In line with expectations, retail sales grew 3.55% for the same period.

China’s real estate investment saw growth of 5.5% in the first two months of the year, which exceeded expectations of economists polled by Reuters, which predicted a 4.4% increase.

China’s onshore yuan weakened after the data release and traded at 6.8822 against the US Dollar.

The People’s Bank of China kept the one-year medium-term credit facility lending rate at 2.75% for 481 billion yuan.

The minutes of the Bank of Japan’s policy meeting in January reiterated the need for members to maintain their ultra-accommodative stance.

“The Bank should carefully state that it needs to continue with monetary easing, that its accommodative monetary policy stance was not changed, and that achieving the price stability target of 2 per cent in a sustainable and stable manner Will take time,” a member was quoted as saying.

Minutes of the meeting also showed that board members expected to see further improvement in Japan’s economy.

“Some members expressed the view that the economy continued to grow, led by domestic demand; in particular, the recovery in demand for services and a virtuous cycle in the corporate sector had become the driving force,” it said.

The yield on 10-year Japanese government bonds rose slightly to 0.296% on Tuesday after falling above the upper limit of its tolerance range last Thursday to 0.276% on Tuesday.

– Jihye Li

Japan’s financials rose in morning trade on Wednesday, reversing the direction seen earlier in the week and following a rebound from Wall Street banks.

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

Technology giant SoftBank Group meanwhile saw a slight loss of 0.62%.

South Korea’s seasonally adjusted unemployment rate for February dropped slightly to 2.6% from January’s figure of 2.9%.

This was also lower than the figure of 2.8% compared to the same period a year ago.

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

– Lim Hui Ji

Venture capital firms told CNBC that the collapse of US-based Silicon Valley Bank is unlikely to affect Southeast Asian startups raising funds.

“I think [the impact on fundraising is] “A watch out, but I don’t think the contagion spreads,” David Goude, managing partner at Southeast Asian VC firm Jungle Ventures, said on CNBC’s “Squawk Box Asia” Tuesday.

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

Vinny Lauria, managing partner at Golden Gate Ventures, said this is Southeast Asia’s “time to shine”.

,[Southeast Asia] “Looks like a golden child for US investors now,” Lauria said Tuesday on CNBC’s “Street Science Asia.”

“Investors are starting to say: I want to be diversified across different bank accounts, different geographies, different currencies.”

-Sheila Chiang

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

The move comes as the sectors reel after the closures of Silicon Valley Bank and Signature Bank. Banking stocks recovered on Tuesday after falling in the past few sessions as the shutdown raised concerns of contagion.

“Our outlook on the US banking system has changed from stable to negative to reflect a sharp deterioration in the operating environment following the deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the SVB failures. SNY,” Moody’s said in a report.

– Alex Haring, Jeff Cox

Markets have had a rocky march so far, as inflation fears return and the collapse of Silicon Valley Bank sent investors into risk-off mode.

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

CNBC Pro subscribers can read more about the shares here.

– Weizen Tan

Despite some speculation that the Fed may hold off on raising interest rates due to recent bank failures, market pricing indicates the central bank remains on track.

Consumer price index data released Tuesday morning was in line with market expectations, indicating the Fed still has work to do in its efforts to reduce inflation.

Traders were pricing in an 86.4% chance of a 25 basis point (0.25 percentage point) increase at next week’s Federal Open Market Committee meeting, up from earlier in the morning. Furthermore, the peak, or terminal, implied level of the rate rose only 5%, according to data from CME Group.

There were some whispers, however, that the Fed should take a more cautious approach in light of the explosions at Silicon Valley Bank and Signature Bank.

“To be clear, we think further hikes are unnecessary; the lagged effect of hikes over the past year has been enough to bring inflation back on target, but Fed officials have so far been reluctant to accept this argument.” And by last week they appeared set on further increases, wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“Recent events make a strong case for a stay until May, but at this point it would be a pleasant surprise rather than our base case,” he added.

—Jeff Cox

Worrying about contagion from the collapse of Silicon Valley Bank? Veteran strategist Kenny Polkari believes that the impact of an SVB failure would be fairly limited.

While investors are mostly skipping the banking sector in the short term, Polkari sees “some very interesting opportunities” in the space, as well as other areas of the market.

Pro subscribers can read more here.

Xavier Ong

The S&P 500 financials sector rose more than 2% and led the broader market, which was boosted by a sharp sell-off in regional bank names in the previous session. Shortly after 10 a.m. ET, the sector was on pace for its biggest one-day gain since Nov. 10, when it gained 5.1%.

Along with technology, communication services and energy also grew by more than 2% each.

— Fred Imbert

The Consumer Price Index rose 0.4% in February from the previous month, matching the Dow Jones estimate. The 6% year-over-year growth was also in line with expectations.

— Fred Imbert