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

Shenzhen-listed shares of Contemporary Amperex Technology ( CATL ) fell slightly after Reuters reported the battery giant was delaying plans for a $5 billion IPO in Switzerland, citing people with knowledge of the matter.

Reuters reported that there was a delay in expected approval from Chinese regulators and that it comes after Chinese President Xi Jinping expressed mixed feelings about the status of his role in a growing electric vehicle industry.

UBS has named a number of Chinese stocks that it says have remained “resilient” during periods of heightened geopolitical tensions between the US and China.

In a note to clients on March 13, the Swiss bank said more market volatility is expected when a potential US investment ban in some Chinese sectors is announced.

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

– Ganesh Rao

Bank shares in Singapore and South Korea rose across the board on Wednesday morning, following gains from banks on Wall Street overnight.

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

South Korean financials saw slightly bigger gains, with KB Kookmin Bank, Shinhan Financial and Woori Financial climbing 2.69%, 1.71% and 2.79% respectively.

— Lim Hui Jie

China’s industrial output rose 2.4% in the January-February period, official data showed.

Retail sales rose 3.55% in the same period, in line with expectations.

China’s investment in fixed assets in the first two months of the year saw an increase of 5.5%, beating the expectations of economists polled by Reuters who had predicted growth of 4.4%.

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

The People’s Bank of China held the interest rate on 481 billion yuan of one-year medium-term credit facility loans at 2.75%.

Minutes from the Bank of Japan’s policy meeting in January showed that members reiterated the need to maintain their ultra-due stance.

“The bank should carefully explain that it had to continue with monetary policy easing, that its accommodative monetary policy stance had not changed, and that it would take time to reach the price stability target of 2 percent in a sustainable and stable way,” one member was quoted as saying.

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

“Some members expressed the view that the economy continued to pick up, led by domestic demand; specifically, an improvement in service demand and a good cycle in the corporate sector had become the driving forces,” it said.

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

– Jihye Lee

Japanese financials rose in morning trade on Wednesday, reversing the direction seen earlier in the week and following Wall Street banks’ setbacks.

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 percent.

Tech giant SoftBank Group, meanwhile, continued to see marginal losses of 0.62%.

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

This was also lower than 2.8% compared to the same period last year.

The total number of unemployed came in at 743,000, lower than January’s 842,000 and February 2022’s figure of 797,000.

— Lim Hui Jie

The collapse of US-based Silicon Valley Bank is unlikely to affect Southeast Asian startups raising funding, venture capital firms told CNBC.

“I think [the impact on fundraising is] be careful, but I don’t think contagion is spreading,” David Gowdey, managing partner at Southeast Asian VC firm Jungle Ventures, said on CNBC’s “Squawk Box Asia” on Tuesday.

He added that “funds in Southeast Asia are well capitalized” and “there is a lot of capital to use.”

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

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

“Investors are starting to say: I want to diversify into different bank accounts, different geographies, different currencies.”

– Sheila Chiang

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

The move comes as the sectors reel after the closure of Silicon Valley Bank and Signature Bank. Bank stocks staged a comeback on Tuesday after falling in recent sessions as concerns about contagion from the closures swirled.

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

– Alex Harring, Jeff Cox

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

Against this backdrop, CNBC Pro used FactSet to search for stocks on the MSCI World Index and the S&P 500 that look well-positioned to weather the volatility and are expected to do well going forward.

CNBC Pro subscribers can read more about the shares here.

— Weizhen Tan

Despite some speculation that recent bank failures could lead to the Fed holding off on rate hikes, market prices indicate that the central bank is still on track.

Consumer price index data released on Tuesday morning was in line with market expectations, showing that the Fed still has work to do in its efforts to bring down inflation.

Traders priced 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 levels earlier in the morning. Also, the implied level of the top or terminal rate rose to just 5%, according to CME Group data.

However, there were some murmurs that the Fed should take a more cautious approach in light of the implosions of Silicon Valley Bank and Signature Bank.

“To be clear, we believe that further increases are now unnecessary; the lagged effect of the increases over the past year is enough to push inflation back to target, but Fed officials have so far been unwilling to accept this argument, and until last week they appeared set for further hikes,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.

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

-Jeff Cox

Worried about contagion from the collapse of Silicon Valley Bank? Veteran strategist Kenny Polcari believes the impact of SVB’s failure will be quite limited.

While investors are largely avoiding the banking sector in the short term, Polcari sees “some very interesting opportunities” in the area, as well as in other segments of the market.

Pro subscribers can read more here.

— Zavier Ong

The S&P 500 financial sector rose more than 2% to lead the broader market higher, boosted by regional bank names that sold off sharply in the previous session. From shortly after 10 ET, the sector was on pace for its biggest one-day gain since Nov. 10, when it rose 5.1%.

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

— Fred Imbert

The consumer price index rose 0.4% in February from the previous month, matching a Dow Jones estimate. The year-on-year increase of 6% was also in line with expectations.

— Fred Imbert