Asia markets trade mixed; ASX hits two-week high as banking fears ease

Australian miners, banks and tech firms lifted the S&P/ASX 200 to its highest level in two weeks on Thursday.

The index is currently trading at 7,120 points, the highest since March 10.

Top gainers on Thursday included miners BHP and Rio Tinto, which gained 2.37% and 1.61% respectively, as well as the “Big Four” banks, which recorded gains of 0.8% to 1[ads1].7%.

The “Big Four” banks refer to the Commonwealth Bank of Australia, National Australia Bank, ANZ Group and Westpac Banking Corp.

Tech firms such as buy now, pay later firm Zip gained as much as 12% to hit a five-week high before paring gains to 7.41%, while mobile payments firm Block Inc rose 4.28%.

— Lim Hui Jie

India has a massive plan to boost manufacturing – and technology firms in Greater China will be a key beneficiary, according to Goldman Sachs.

The investment bank called the plan a “significant opportunity” for such firms, and names two stocks to buy, including a global technology giant. One of them has an upside of almost 60%.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Shares in Hong Kong-listed Alibaba rose as much as 2.7% in early trade and last traded nearly 1.8% higher after Alibaba executives further clarified the nature of the latest restructuring announcement to split into six units, each with opportunity to obtain external financing and go public.

CEO Daniel Zhang told investors on a conference call Thursday morning, “Alibaba will be more of an asset and capital operator than a business operator, relative to the companies in the business group.”

He added that the entities announced in the restructuring will have their own CEOs and boards and Alibaba will retain boardroom seats in the short term.

After the restructuring process takes place and the separate entities go public, Alibaba “will continue to evaluate the strategic importance of these companies,” CFO Toby Xu said on the call, adding that it “will decide whether or not to continue to retain control .”

CreditSights maintained its “outperform” rating on Alibaba following its overhaul of its business structure, adding that the plans will not have a major impact on the company’s credit.

“We see a limited near-term impact of the reorganization on Alibaba’s debt calculations given that all six entities remain consolidated and controlled by the group,” CreditSights said in a note.

It expects to see potential from the separate entities’ collections, particularly entities that have been unprofitable, to be a net credit positive effect on the wider group.

“We believe the corporate reorganization reduces the risk of Alibaba burning through cash to fund unprofitable business lines,” the note added.

“We expect the potential separate equity raising (including IPOs) of these business units to help ease the cash burn for Alibaba, a credit positive in our view,” it said.

– Jihye Lee

Japanese Prime Minister Fumio Kishida said the government will draw up a plan in June on “new capitalism” that focuses on wage increases, innovation and solving social problems, Reuters reported.

Kishida added that the government will make efforts to reduce the wage gap between domestic firms and their foreign rivals, the report said.

Separately, Reuters also reported that the prime minister said he was not considering an early dissolution of parliament, refuting local media reports that his administration is calling for a snap election in the coming months.

Japanese media cited Kishida as having passed the full 2023 budget proposal as motivation to call a snap election to strengthen his position in the party.

– Jihye Lee

Australia’s quarterly job vacancies fell in the February quarter, Australia’s Bureau of Statistics said on Thursday.

Total vacancies fell 1.5% from November 2022 to 438,500, government data showed – private sector vacancies fell 1.5%, while public sector vacancies fell 1.4%.

The fall in vacancies was driven by retail trade, the ABS said, adding that vacancies were 92.4% higher than seen in the same quarter in 2020, before the Covid pandemic.

– Jihye Lee

Bank Negara Malaysia expects to see full-year growth of 4% to 5% for the economy, it said in its annual report.

The central bank said the growth forecast would be supported by “firm domestic demand”.

“Further improvement in labor market conditions, continued implementation of multi-year investment projects and higher tourism activity are expected to support private consumption and investment growth,” the report says.

The central bank noted upside risks to its inflation forecasts of between 2.8% and 3.8% for the year, including stronger-than-expected demand from China as well as further geopolitical conflict.

– Jihye Lee

The Bank of Thailand on Wednesday raised its benchmark interest rate by 25 basis points to 1.75%.

The central bank said the Thai economy is expected to continue expanding, driven by tourism and private consumption, while noting increased uncertainty over the recent turmoil surrounding banks in the United States and Europe.

“Global economic uncertainty has increased, in part from persistent inflationary pressures and episodes of banking stress in advanced economies,” it said in its policy statement.

It noted that Thailand’s banks have not been affected by the turmoil, adding that the system is “resilient”.

“Recent banking stress in some advanced economies has not had a significant impact on the Thai financial system, as Thai financial institutions and companies have limited linkages with troubled banks and risky assets,” the central bank said.

– Jihye Lee

Singapore’s monetary authority has called DBS Bank’s outage on Wednesday “unacceptable” and said the bank has “failed” expectations.

MAS said it has asked DBS to investigate and determine the cause of the disruption, before submitting its findings to the authority. It will then “take the corresponding supervisory actions after gathering the necessary facts,” MAS said in a statement.

The outbreak on Wednesday led to DBS’s digital services being disrupted from 10am until 5.45pm.

DBS CEO Piyush Gupta said on Wednesday that the bank was “disappointed” by the incident, adding that “we hold ourselves to higher standards and it is our highest priority to review today’s events.”

– Lim Hui Jie

Adani Transmission and Adani Ports and Special Economic Zone are exposed to “higher contagion risk,” Fitch Ratings said in its press release.

“The governance weaknesses at the sponsor level and other entities of the Adani group expose even the group’s stable cash-generating corporate-like issuers, Adani Transmission Limited and Adani Ports and Special Economic Zone Limited, to higher contagion risk,” Fitch Ratings said.

It added that if such risks are not properly managed, the entities may see their financial flexibility affected.

Fitch reiterated both companies’ ratings at BBB- in the release. Shares in Adani Transmission fell 0.5% in Wednesday trade in Mumbai, while Adani Ports and Special Economic Zone rose more than 5%.

– Jihye Lee

All 11 S&P 500 sectors traded up, helping to bolster the index’s rally.

In the lead was information technology with an increase of 1.9%, followed by real estate with 1.7%. Healthcare was the group’s laggard, but was still up 0.1%.

Meanwhile, the broader index rose 1.2 percent.

– Alex Harring

Strength in tech stocks lifted the Nasdaq Composite nearly 1.3% as of 11:45 a.m. Wednesday, helping the tech-heavy index bounce back from a losing session.

Semiconductors and major technology stocks contributed heavily to those gains, with Amazon up nearly 3%. Apple, Nvidia, Microsoft, Meta Platforms, Salesforce and Netflix gained more than 1% each.

A rally in Micron shares despite a disappointing quarter helped the broader semiconductor sector. Micron rose about 6%, while Marvell Technology, Intel and Lam Research gained at least 4% each. ON Semiconductor, Qualcomm and Analog Devices rose more than 2%, while Advanced Micro Devices rose 1.4% higher.

The S&P 500’s information technology sector gained 1.6%, while communications services gained about 1%.

– Samantha Subin

Officials had enough rules to effectively supervise the regional banks that failed recently, the Federal Reserve’s top regulator said Wednesday.

“I think we had significant authority under existing law to regulate firms and supervise firms in a way that was appropriate for their risk and size and complexity,” Michael Barr, the Fed’s deputy chairman for supervision, told the House Financial Services Committee.

Some lawmakers, such as Sen. Elizabeth Warren (D-Mass.) have suggested tighter regulation of banks is needed. Barr and other bank officials seemed to agree with that sentiment during Senate testimony Tuesday.

Barr said the mistakes that led to the demise of Silicon Valley Bank and Signature Bank were diffused.

“I think any time you have a bank failure like this, bank management clearly failed, regulators failed and our regulatory system failed. So we look at all of that,” he said.

-Jeff Cox

Shares in UBS rose on Wednesday after the Swiss bank announced it was bringing back Sergio Ermotti as chief executive to help oversee the absorption of Credit Suisse.

Ermotti, who previously served as the bank’s CEO from 2011 to 2020. He will resume control on April 5.

In a note to clients, Bank of America analyst Alastair Ryan cited Ermotti’s “signature restructuring” of the bank during his previous tenure as a reason why investors would be pleased with his returns.

The Swiss-traded shares of UBS rose 4.4% after the announcement.

The stock remains down since the first week of March, when concerns about the banking system on both sides of the Atlantic began.

-Jesse Pound