Hong Kong stocks up 3% as tech shares rise; China’s activity data disappoints

Fertilizer is the key to restarting the grain trade in the Black Sea, says an expert

Biden-Xi speaking:

A greater emphasis on fertilizers will help reduce global food costs and ensure the extension of the Black Sea Agreement, said Michael Vatikiotis, senior adviser from the Center for Humanitarian Dialogue.

He explained that 70% of Europe’s fertilizer production facilities are idle due to insufficient ammonium nitrate, of which Russia produces a quarter of the world’s output.

“I think what Russia is looking for is more concern from the international community about the demand for fertilizer so that they can kind of implement that agreement,” said Vatikiotis, who added that a greater emphasis on fertilizer is needed to bring down the global food costs.

– Lee Ying Shan

Japan’s monetary policy will not change in the next nine to 12 months: Monex Group

Japan's monetary policy 'definitely not' tightening anytime soon: Financial services

The Bank of Japan will remain a “bastion of stability” for close to another year because the output gap in the economy persists, Monex Group’s Jesper Koll told CNBC after Japan released its estimates for third-quarter gross domestic product.

He said the GDP figure, which missed expectations, confirmed “how sensitive in a negative way the Japanese consumer is” in the current environment.

Beyond the next 12 months, the central bank will have to take into account whether the US economy ends up with a soft landing or a hard landing, Koll said.

He added that he is looking at whether the Japanese government is able to come up with a structural industrial policy that encourages business to commit to its own investment spending.

— Abigail Of

There is tremendous value in some Chinese tech stocks, says Primavera Capital

Shares of major Chinese technology companies are currently “just so depressed” and “dirt cheap,” said Fred Hu, founder and chairman of Primavera Capital.

Hong Kong’s Hang Seng Tech index is down more than 30% since the start of the year, although the index has bounced in recent weeks.

The Chinese government’s relentless crackdowns and zero-Covid policies have dampened confidence in tech entrepreneurs and investors, but there is “tremendous deep value” in some tech stocks, Hu said.

“China is a nation that any other successful nation would need [for] technology and innovation … I think there’s upside” for many such stocks, he added.

— Charmaine Jacob

Hong Kong-listed Chinese tech stocks jump early in the session

Hong Kong-listed shares of Chinese technology companies rose significantly in the first hour of trading.

Tencent rose 7.6 percent, Meituan increased 5.9%, and Ali Baba rose 9%. The Hang Seng Tech index rose around 4%.

The measures come despite disappointing activity and retail sales data from China, and after US President Joe Biden and Chinese President Xi Jinping met ahead of the G-20 summit in Bali.

Private investment firm Safanad’s chief strategist John Rutledge said the discussion between the two executives went “much better” than expected, although he largely credited that to low expectations.

The Biden-Jinping meeting went much better than I expected, says Safanad's Rutledge

TSMC shares jump more than 9% on Berkshire Hathaway news

Shares of Taiwan Semiconductor Manufacturing Company listed in Taiwan jumped after Berkshire Hathaway disclosed a $4 billion stake in the company.

The stock rose as much as 9.44%, hitting the highest levels in nearly two months.

Berkshire added more than 60 million shares of the Taiwanese chipmaker’s American depositary receipts, worth $4.1 billion (1.2% of TSM) at the end of the third quarter, making Taiwan Semi the conglomerate’s 10th largest holding at the end of September.

The stock was last up around 8%.

China’s industrial production, retail sales miss expectations in October

China’s industrial production grew 5% in October from a year ago, slowing from a 6.3% increase in September. The latest figure misses estimates of a 5.2% increase predicted in a Reuters poll.

Separately, retail sales in China fell 0.5% in October from a year ago, missing expectations.

Analysts polled by Reuters had expected a 1% increase, and retail sales rose 2.5% in September.

— Abigail Of

CNBC Pro: Top Morningstar Strategist Says Stocks Are Undervalued by 15% and Shares 6 Favorites

With many stocks in a bear market, stocks can be undervalued by 15%, according to Morningstar.

The equity research firm’s chief U.S. strategist believes headwinds that were present earlier in the year will begin to wane early next year and distribute stocks.

Dave Sekera also shared his “fair value” rating on six companies with a “wide financial moat” that will outperform in such an economic environment.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Australia’s central bank hints at bigger rate hikes ahead

The Reserve Bank of Australia hinted at further and possibly larger rate hikes ahead in its efforts to tame inflationary pressures, according to the minutes of its latest meeting.

“The board agreed on the importance of getting inflation back to the target and expects to raise interest rates further in the period ahead,” the message says.

The central bank had considered raising cash interest rates by 50 basis points, but saw a stronger argument for raising interest rates by 25 basis points, it says.

Higher interest rates would be part of wider efforts to “establish a more sustainable balance between demand and supply in the Australian economy,” the RBA said, adding that members had not ruled out a return to larger hikes if necessary.

– Jihye Lee

Japan’s economy unexpectedly contracted in the third quarter, data show

Japan’s economy contracted unexpectedly in the third quarter from a year ago, official preliminary estimates showed.

The gross domestic product shrank by 1.2 per cent in the July-September quarter compared to the same period last year, missing estimates for growth of 1.1% in a Reuters poll.

— Abigail Of

CNBC Pro: China eases its Covid measures. Here’s how the marketing pros play it

Which stocks could benefit if China rolls back its zero-Covid policy? Market pros reveal how to play a reopening as China eases some of its virus controls.

Pro subscribers can read more here.

— Zavier Ong

Stocks of decline in session on Brainard comments

The S&P 500 bounced back from its lows and Treasury yields fell from their highs a bit late in the morning after Federal Reserve Deputy Chairman Lael Brainard said it may be appropriate “soon” to slow the pace of rate hikes, in a call with Bloomberg News.

The S&P 500 was last down just 0.1% after being down more than 0.7% at one point on Monday. The 10-year Treasury yield was 5 basis points higher at 3.878% after trading as high as around 3.90% earlier.

“I think what’s really important to emphasize is that we’ve done a lot, but we have additional work to do both in raising interest rates and maintaining restraint to get inflation down to 2% over time,” Brainard added.

—John Melloy, Jeff Cox

Fed’s Waller’s message to markets: Price endpoint is ‘still a way out there’

Fed Governor Christopher Waller said that while the central bank may raise interest rates at a slower pace next month, this should not be interpreted as a softening sign in the fight to bring down inflation.

“Stop paying attention to the pace and start paying attention to where the endpoint is going to be. Until we get inflation down, that endpoint is still a ways out there,” Waller said Sunday.

Earlier this month, the Fed raised interest rates by 75 basis points to the highest level since 2008.

— Fred Imbert

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