Asian markets rise as Wall Street is lifted by hopes of a debt ceiling deal

Shares of Chinese tech giant Tencent in Hong Kong have fallen more than 3%, even as the company reported an 11% jump in quarterly revenue to 150 billion Chinese yuan ($21.4 billion).

This marked the fastest growth in more than a year, as the company saw a big uptick in payment volume, ad sales and games.

Net profit rose 10% to 25.8 billion yuan, lower than the 31 billion yuan expected by economists polled by Reuters.

̵[ads1]1; Lim Hui Jie, Ryan Browne

Japanese markets extended their winning streak on Thursday, with the Nikkei 225 leading the region’s gainer and continuing to trade above the 30,000 mark.

The Topix maintained levels not seen since August 1990.

Energy and technology stocks led the Topix, with the biggest winners being Sony and electronics company Tokyo Electron.

Meanwhile, Factset revealed that electronics stocks drove the Nikkei, with the top gainer on the index being semiconductor test equipment maker Advantest, followed by Tokyo Electron.

— Lim Hui Jie

Nomura downgraded its growth forecast for all of China from 5.9% to 5.5%, according to a Wednesday note.

“China’s post-Covid recovery has rapidly lost momentum,” Nomura’s Ting Lu wrote, noting that the latest activity data and high-frequency data in May show that momentum has lost steam “partly due to weak confidence among consumers and business investors.”

“As disappointment sets in, we see an increasing risk of lower activity growth, rising unemployment, persistent disinflation, falling market interest rates and a weaker currency,” he wrote.

Nomura added that it is also cutting its 2024 forecast for China’s gross domestic product from 4.4% to 4.2%. It now expects second quarter GDP to grow 7.8%, third quarter to grow 4.9%, and the final quarter of the year to grow 5.0%.

– Jihye Lee

Japan’s trade deficit nearly halved in April, falling to 432.41 billion from 854.93 billion a year ago.

Most notably, imports fell 2.3% year-on-year, more than the 0.3% expected by economists polled by Reuters.

Exports were largely in line with expectations, rising 2.6% year-on-year compared to the expected 3%.

— Lim Hui Jie

New Zealand’s producer price index rose 0.3% in the first quarter of 2023 compared to the last quarter of 2022, government data showed.

The input producer price index rose 0.2% – with the farm expenditure price index rising 0.7% and the capital goods price index rising 1%.

The New Zealand dollar strengthened slightly to 0.6242 against the US dollar.

– Jihye Lee

Nvidia, the company behind the most powerful chips used to enable artificial intelligence (AI), has the potential to increase its share value by five times over the next ten years, according to investor and fund manager Philip Ripman.

Investor enthusiasm for Nvidia centers around its business model of selling high-performance graphics processing units (GPUs) that are critical to running the complex algorithms behind artificial intelligence technologies. As AI has become increasingly important across industries, the demand for GPUs has increased.

CNBC Pro subscribers can read more of Ripman’s views on Nvidia here.

– Ganesh Rao

The year is nearing its halfway mark, and global stocks have fared much better than they did in the volatile 2022.

Many stocks have risen and beaten the overall market, but there is still more room for investor bullishness.

CNBC Pro looked for stocks that are beating the market nearly halfway through the year — and that analysts love. One is a Buffett favorite, and two others are top picks by BofA and Citi.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Montana became the first US state to impose a complete ban on the video app TikTok.

Montana Gov. Greg Gianforte said in a release: “The Chinese Communist Party’s use of TikTok to spy on Americans, violate their privacy and collect their personal, private and sensitive information is well documented.”

“Today, Montana is taking the most decisive action of any state to protect Montanans’ private data and sensitive personal information from being harvested by the Chinese Communist Party,” he wrote.

The governor also directed the state’s chief information officer and executive agency directors to “prohibit the use of all social media applications linked to foreign adversaries on government equipment and for government business,” the release added.

TikTok called the move “a bill that violates the First Amendment rights of the citizens of Montana,” adding that the ban is “unlawful.”

“We want to reassure Montanans that they can continue to use TikTok to express themselves, make a living, and find community as we continue to work to defend the rights of our users inside and outside of Montana,” TikTok said in a statement.

– Jihye Lee

The Federal Reserve’s rate hike cycle may be coming to a pause — and Bank of America thinks some smaller names could outperform.

The central bank indicated in its statement after the meeting in May that it cannot raise interest rates beyond the current range of 5% to 5.25%. Bank of America said its economists expect cooling inflation and a mild recession in the coming months after the pause in monetary policy.

If this is the case and the Fed ends its rate hike campaign, investors may want to consider investing in some small-cap stocks that have done well historically.

CNBC Pro subscribers can read about which stocks Bank of America thinks will outperform here.

– Hakyung Kim

Tech stocks climbed higher during Wednesday’s rally. The Technology Select Sector SPDR Fund ( XLK ) rose 1.2%, hitting a 52-week high. It is the third session in a row that the fund reached that milestone.

Tech ETD is up 2% this month, pushing 2023 gains to nearly 24%.

Investors veered away from defensive stocks on Wednesday. Of the 11 S&P 500 sectors, only health care, consumer staples and utilities traded in negative territory during midday trading.

Healthcare stocks fell 0.9%, while utilities stocks fell 0.5%. Consumer goods decreased by 0.4%.

—Sarah Min

House Speaker Kevin McCarthy expressed optimism on Wednesday that although the debt ceiling negotiations face obstacles, he does not foresee a default.

“I think at the end of the day we don’t have a debt default,” he said on CNBC’s “Squawk Box.” “I think we finally got the president to agree to negotiate.”

The comments come a day after President Joe Biden met with top leaders in Congress to try to find a way around the debt freeze. McCarthy said the talks resulted in a “structure” to find a solution, while noting that the deadline remains “tight” as Republicans look for spending cuts and Democrats seek a clean bill that is not tied to conditions.

“There comes a moment when you hit the wall,” McCarthy said. “You cannot continue down this path if you want to continue to be the strongest nation in the world.”

-Jeff Cox