Asian markets mixed as investors weigh more Wall Street earnings

There is still “headroom” for Tata Communications to expand internationally, the company’s CEO Amur Lakshminarayanan said.

“We still think our international markets have a lot more room for us to grow because we’re a very small part of what other incumbents are doing,” Lakshminarayanan told CNBC’s “Street Signs Asia” on Thursday.

“We̵[ads1]7;re going to take more market share from others, rather than expand the market,” he added.

Lakshminarayanan highlighted that Tata Communications is thrilled and excited about the company taking shape as a “digital fabric” and how it has helped customers both in India and globally.

– Charmaine Jacob

Tim Cook has made a big bet on India as Apple shifts its focus away from China and expands its footprint in the fifth-largest economy.

Still, analysts told CNBC that the iPhone maker’s reliance on China will remain for years to come.

There is potential for India to “become the next China” for Apple manufacturing, but it could take as long as a decade for that to happen, said Martin Yang, senior emerging technologies analyst at Oppenheimer & Co.

It is also highly unlikely that Apple will be able to completely eradicate its dependence on China, said Navkendar Singh, assistant vice president of International Data Corporation (IDC) India.

“Given the cost scales, logistics and sheer inertia of some of the suppliers in the China ecosystem, it is highly unlikely that Apple can completely remove itself from China,” highlighted Singh.

The tech giant currently manufactures 5% to 7% of its iPhones in India, a jump from just 1% in 2021 – and it’s not stopping there with further plans underway to increase the company’s prominence in the country.

Read the whole story here.

— Charmaine Jacob

The People’s Bank of China maintained its prime rates for 1- and 5-year loans at 3.65% and 4.3% respectively.

The country’s reference interest rate for lending has been unchanged since August 2022.

The 1-year interest rate affects new loans, while the 5-year interest rate affects mortgages.

China reported on Monday that its economy grew 4.5% in the first quarter of the year, beating the 4% forecast in a Reuters poll.

– Yeo Boon Ping

China gives foreign investors the confidence to put their money in the country, said Ben Harburg, managing partner at MSA Capital, a global private equity and venture capital firm.

“It’s critical for regulators to strengthen the market and make global investors feel safe here,” Harburg said on CNBC’s “Street Signs Asia” Thursday.

“China is making it much easier today for foreign asset managers to bring their money directly [into] the Qualified Foreign Limited Partnership country rather than working with local groups, such as HSBC and Ping An in that case,” Harburg said.

HSBC issued a statement on Thursday about Ping An’s proposal for a minority listing of HSBC’s Asia-Pacific businesses or a consolidation of HSBC’s Asia-Pacific businesses under a single listing, saying it would result in significant loss of value to shareholders.

“I expect to see more Chinese pushback to these forms of restructuring or more and more backlash from the Western firms as well because they now realize they can access the market directly without working with a local asset manager,” Harburg said.

– Sheila Chiang

Japan’s annual core inflation is expected to come in at 3.1% for March, according to a Reuters poll.

This is unchanged from the same figure in February, and comes after inflation in Japan fell to 3.1% in February, down from January’s 41-year high of 4.2%.

Japan’s core inflation excludes the cost of fresh food from headline inflation figures, which were 3.3% in February.

If the March numbers come in as expected, core consumer inflation will exceed the Bank of Japan’s 2% target for twelve consecutive months.

— Lim Hui Jie

HSBC has recommended that shareholders vote against spinning off its Asian business, which was proposed by its biggest investor Ping An Asset Management.

In a note released on Wednesday, the bank highlighted four reasons behind the recommendation.

First, “separation is not consistent with HSBC’s business model,” which is an integrated bank. Second, there would be “meaningful revenue dis-synergies”, such as less coordinated customer service.

Subsequently, splitting up the bank will also entail “material one-off and ongoing operating costs”, such as tax leakage and the need for increased capital. Finally, any separation would involve “implementation risk”, creating a “multi-year period of uncertainty”.

Ping An has pushed for HSBC to split up its Asian operations to boost the bank’s returns. “HSBC Group has tapped HSBC Asia for dividends and growth capital to support its relatively low-return businesses outside Asia,” Ping An said in a statement on Tuesday.

– Yeo Boon Ping

Japan’s trade deficit hit a record high of 21.7 trillion yen ($161.14 billion) for the twelve months ended March, up sharply from 5.59 trillion yen recorded in the same period a month ago.

Exports from April 2022 to March rose 15.5% year-on-year to 99.2 trillion yen, while imports increased to 120.95 trillion yen.

For March alone, Japan’s exports rose 4.3% year-on-year, lower than the 6.5% recorded in February, while imports rose 7.3% in the same period, lower than February’s 8.3% increase.

Japan’s March trade deficit narrowed to 754.5 billion yen, down from a deficit of 897 billion yen in February.

— Lim Hui Jie

Investment bank UBS has identified global stocks to buy in what could be a year of “slow inflation” – a combination of weak growth and soaring inflation.

The Swiss bank’s strategists said they expect weak global growth of 2.6% in 2023, compared with the 50-year average of 3.5%. They also said slower-than-expected progress was being made in bringing core inflation towards the central bank’s target.

CNBC Pro subscribers can read more here.

– Ganesh Rao

New Zealand’s first-quarter inflation rate eased to 6.7% year-on-year, lower than economists’ expectations of 7.1% and the previous quarter’s figure of 7.2%.

The country’s statistics department revealed that food costs were the biggest contributor to inflation in the first quarter, increasing by 11.3% compared to the same period last year.

Earlier this month, the Reserve Bank of New Zealand raised interest rates by 50 basis points in a surprise move, bringing the benchmark rate to 5.25%.

— Lim Hui Jie

Tech has been a bright spot in a volatile market this year.

“The leaders this year are definitely Apple and Microsoft,” Louis Navellier, chairman of Navellier & Associates, told CNBC’s “Street Signs Asia” on Wednesday. “They are now the highest weightings ever in the S&P 500.”

But he argued that the “real leader” in the S&P 500 is another stock. He also gave three other stock picks with high expected earnings growth.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Earnings season has started on a positive note, with 10% of the broader index reporting better-than-expected earnings. Of the 53 companies in the S&P 500 reporting so far, 83% have beaten Wall Street expectations by 6%. Both of these prices are above average.

The broad-based index has seen modest gains in recent weeks, rising 7% since bottoming out at the height of the banking crisis in mid-March.

—Pia Singh

The banking crisis in March took its toll on financial activity, particularly in the New York and San Francisco regions, according to the Federal Reserve’s periodic economic survey released Wednesday.

Since the last release, on January 18, of the Fed’s “Beige Book”, banking and in some cases commercial real estate have seen a significant decline in activity. on deposit.

“Loan volume and loan demand generally declined across consumer and business loans” nationally, the report noted.

In the San Francisco area, “Residential and commercial real estate activity declined, and lending activity declined significantly,” while “Lending activity declined significantly. Communities throughout the Twelfth District faced increased challenges in their ability to provide food, shelter, and services due to credit constraints and reduced philanthropic contributions.”

In New York, “Conditions in the broad financial sector deteriorated sharply along with recent stress in the banking sector.”

The Fed lending facilities put in place have helped to stem some of the damage from the SVB failure and subsequent banking stress.

The report otherwise only noted that general economic activity had changed little since the previous submission.

-Jeff Cox

Technology stocks showed signs of early weakness Wednesday, with the S&P 500’s information technology and communications services sectors housing many popular names down 0.8% and 1.1%, respectively.

Netflix led some of the sector’s losses, last down 4% as the streaming giant posted mixed results and pushed out plans to reduce password sharing. The streaming giant was the biggest drag on communications services, followed by Fox and Walt Disney, which fell more than 2% each.

Microsoft and Alphabet fell 1% each, while Meta Platforms was down 1.7%. Tesla, which was due to report earnings after hours, lost 2.7%.

Amazon was the only big, big technology player in the green, and was up with approx. 0.6% amid news of ad unit layoffs.

– Samantha Subin

Morgan Stanley posted earnings per share of $1.70 for the first quarter, topping the $1.62 estimate from analysts polled by Refinitiv. Total revenue came in at $14.52 billion, above the consensus estimate of $13.92 billion from Refinitiv, as equity and fixed income trading units performed better than expected.

One area of ​​growth was asset management, where revenues increased by 11% from the previous year.

The shares, which have outperformed most other banks this year, fell 2% in early trade despite the upbeat results.

“The investments we’ve made in our wealth management business continue to bear fruit as we added a robust $110 billion in net new assets this quarter,” Chairman and CEO James Gorman said in the earnings release. “Equity and fixed income were strong, although investment banking activity continued to be limited.”

– John Melloy