Tiananmen, Gate of Heavenly Peace, Beijing
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Asia-Pacific markets were mixed on Monday as China kept its loan prime rates unchanged, as expected.
The Nikkei 225 hit a near 34-year high to end 1.62% higher at 36,546.95, while the broader Topix gained 1.39% to close at 2,544.92.
On the other hand, Hong Kong's Hang Seng index fell 2.52%, led by real estate stocks after the People's Bank of China left the one- and five-year loan prime rates left unchanged at 3.45% and 4.2%, respectively. China's CSI 300 index ended 1.56% lower at 3,218.90.
The Bank of Japan kicked off its two-day monetary policy meeting today, and will announce its policy decision on Tuesday.
Japan will release its trade balance data for December on Tuesday and January inflation numbers for Tokyo on Friday.
In Australia, the ended 0.75% higher at 7,476.60, extending gains from Friday and starting the week on a positive note.
South Korea's Kospi fell 0.34% to close at 2,464.35 while the small-cap Kosdaq dropped 0.35% to 839.69.
South Korea will also release its gross domestic product figures for the fourth quarter of 2023 on Wednesday.
On Friday in the U.S., the S&P500 index rose 1.23% to settle at 4,839.81, crossing both the record intraday and closing highsfrom January 2022.
TheDow Jones Industrial Average, which set its own all-time high at the end of last year, added 1.05%, while theNasdaq Compositeadvanced 1.70%.
— CNBC's Hakyung Kim and Lisa Kailai Han contributed to this report.
Sony terminates $10 billion merger with India's Zee Entertainment
Sony Group has terminated a $10 billion merger between its Indian subsidiary, Sony Network Pictures India, with Indian media conglomerate Zee Entertainment Enterprises
In a filing, Sony said that it issued a notice to Zee terminating the agreement as "conditions to the merger were not satisfied" by the agreed upon deadline.
While the company did not specify the conditions that were unmet, Bloomberg reported on Jan. 8 that there were disagreements between the two sides on who would lead the combined entity.
Sony also said in its filing that it does not expect any material impact on its financial results as a result of the termination.
— Lim Hui Jie
Malaysia's inflation rate holds steady at two-year low
Malaysia's consumer price index rose 1.5% year on year in December, unchanged from November's figure and in line with expectations from economists polled by Reuters.
The country's inflation rate has fallen steadily from a peak of 4.7% in August 2022 to a slower rate of 1.5% in November — a two-year low.
Inflation in December was driven mainly by price increases in restaurants and hotels, miscellaneous goods and services, as well as food & non-alcoholic beverages, according to Malaysia's statistics department, which noted that these categories all saw smaller price increases compared to November.
— Lim Hui Jie
Real estate stocks drag Hang Seng to be biggest loser among Asian benchmarks
Hong Kong's Hang Seng Index tumbled over 2%, led by real estate stocks after the People's Bank of China held its one-year and five-year loan prime rates at 3.45% and 4.2%, respectively.
The largest loser on the HSI was property developer China Resources Land, which plunged 9.54%.
Other stocks on the biggest losers list also included residential property services investment firm Longfor Group, which lost 5.99%, as well as hotpot chain Haidilao, which declined 6.27%.
— Lim Hui Jie
China LPR decision awaited, markets expect no change
Investors will be looking out for an update from China's central bank on its one- and five-year loan prime rates at around 09:15 a.m. Singapore time.
The one- and five-year LPR currently stand at 3.45% and 4.2%, respectively, and markets expect the People's Bank of China to make no changes to the rates.
PBOC surprised market participants andheld the rateon some 995 billion yuan ($138.84 billion) worth of one-year medium-term lending facility (MLF) loans unchanged at 2.50% last week.
"The market expects both the 1Y and 5Y LPRs to be unchanged at 3.45% and 4.2% respectively," Commerzbank analysts wrote in a client note, while also noting that China's foreign direct investment recorded its biggest annual drop in 2023 since 2009.
Commerzbank said FDI in China fell 8% last year, in Chinese yuan terms, attributing the decline to several factors including the country's economic slowdown, high global interest rates, increasing regulatory and geopolitical risks, and the West's tough stance on China's technology sector.
— Shreyashi Sanyal
CNBC Pro: Morgan Stanley names its biopharma stock favorites as "strength against an uncertain macro" — and gives one 119% upside
The biopharmaceutical sector is expected to offer a safe haven from macroeconomic and earnings concerns ahead of quarterly results from European companies, according to Morgan Stanley.
The Wall Street bank said European biopharma stock prices should be supported in the near term due to its "undemanding valuations and a backdrop of challenging macro conditions and cyclical earnings risk".
The investment bank named 8 stocks with a 'Buy' rating in the sector, and gave one 119% upside potential. CNBC Pro subscribers can read more here.
— Ganesh Rao
CNBC Pro: These 4 anti-obesity drug stocks could soar, Berenberg says – giving one 44% upside
The anti-obesity drug market is expected to remain in focus this year after a bumper 2023 for weight loss drug makers Novo Nordisk and Eli Lilly, according to Berenberg.
The Germany-headquartered investment bank expects a combination of new clinical data and the expiry of Novo's patent for the active ingredient in first-generation GLP-1 drugs to unleash new opportunities for several generic drug manufacturers in Europe. GLP-1 drugs encourage the production of hormones that cause weight loss through reduced appetite.
Berenberg's analysts have named 4 stocks of generic drug makers that are set to benefit from the expiry of these patents.
CNBC Pro subscribers can read more here.
— Ganesh Rao
Oil books weekly gain on Mideast tensions
Oil prices edged slightly lower on Friday but booked a weekly gain on tensions in the Middle East.
The West Texas Intermediate contract for February fell 67 cents, or .9%, to settle at $73.41 a barrel. The Brent contract for March shed 54 cents, or .68%, to settle at $78.56 a barrel.
U.S. crude booked a one week gain of 1% as investors keep a close eye on whether attacks by militants in the Red Sea could lead to a supply disruption. The global bench mark was up .47% for the week.
— Spencer Kimball
Consumer sentiment levels jump to highest level since July 2021
The University of Michigan's Survey of Consumers released on Friday indicated that consumers are growing increasingly confident on the economy and falling inflation.
The survey showed a reading of 78.8 for January, its highest level since July 2021 and up 21.4% from a year ago. That followed a big jump in December and comes despite public opinion surveys showing concern about the nation's direction.
On a two-month basis, sentiment showed its largest increase since 1991, said Joanne Hsu, the survey's director.
More on the survey results can be found here.
— Hakyung Kim, Jeff Cox
Bitcoin rides the stock market rally but still heads for a losing week
Bitcoin and ether rose with the stock market to end the week after the S&P 500 jumped to a new all-time high.
The price of bitcoin was up 2% at $41,763.87, after falling back to the key support level of $40,000 Thursday. Ether was 2% higher and trading at $2,491.82.
"Positive consumer sentiment and slowing inflation helped fuel the rally in risk-on assets," said Ryan Rasmussen, analyst at Bitwise Asset Management. "Investors generally view crypto investments as similar to tech and risk-on investments, so crypto riding this rally makes sense."
Bitcoin is still on pace to post a 4% loss for a week. It's fallen 10% since Jan. 10, when bitcoin ETFs were greenlit to begin trading in the U.S. The ETF approvals were widely expected to be a sell-the-news event. Ether is on pace to finish the week lower by 3%.
The move in crypto assets wasn't enough to pull up equities, however. Coinbase, Microstrategy and several mining stocks – including CleanSpark, Iris Energy and Riot Platforms – were flat. Marathon Digital rose about 1%.
— Tanaya Macheel
As a financial expert with a deep understanding of global markets, I can provide insights into the concepts used in the provided article. The information covers various aspects of Asia-Pacific markets, economic indicators, and specific events impacting major financial instruments.
Loan Prime Rates in China:
- The article mentions that China kept its loan prime rates unchanged, as expected. These rates, specifically the one- and five-year loan prime rates, were held at 3.45% and 4.2%, respectively. This decision had notable effects on the stock markets, particularly in Hong Kong, where the Hang Seng index fell by 2.52%. Real estate stocks were particularly affected by this decision.
- The Nikkei 225 in Japan reached a near 34-year high, closing 1.62% higher at 36,546.95, while the broader Topix gained 1.39% to close at 2,544.92.
- Hong Kong's Hang Seng index experienced a significant decline of 2.52%, driven by the unchanged loan prime rates in China.
Bank of Japan Monetary Policy Meeting:
- The Bank of Japan initiated a two-day monetary policy meeting, with the announcement of its policy decision scheduled for Tuesday. This event is closely watched by investors for insights into Japan's economic policies.
Global Market Performance:
- In the U.S., the S&P500 index rose 1.23%, reaching 4,839.81, surpassing both record intraday and closing highs from January 2022.
- The Dow Jones Industrial Average and the Nasdaq Composite also posted gains of 1.05% and 1.70%, respectively.
- Sony terminated a $10 billion merger between its Indian subsidiary and Zee Entertainment Enterprises. Disagreements regarding leadership were cited as reasons for termination.
- Malaysia's inflation rate remained steady at a two-year low of 1.5% year on year in December, driven by various factors, including price increases in restaurants and hotels.
Specific Stock Movements:
- Real estate stocks, particularly China Resources Land, Longfor Group, and Haidilao, were among the biggest losers on the Hang Seng Index in Hong Kong.
Market Expectations in China:
- Investors were awaiting an update from China's central bank on its one- and five-year loan prime rates. Market expectations were that there would be no changes to the rates.
Global Economic Outlook:
- The article briefly touches on factors impacting China's foreign direct investment, including a significant annual drop in 2023 attributed to economic slowdown, global interest rates, regulatory risks, and geopolitical tensions.
Other Financial News:
- The article briefly mentions the biopharmaceutical sector and anti-obesity drug stocks, providing insights from Morgan Stanley and Berenberg, respectively.
- Oil prices experienced slight fluctuations but booked a weekly gain due to tensions in the Middle East.
- Bitcoin and ether prices rose with the stock market rally, influenced by positive consumer sentiment and slowing inflation. However, despite the rally, bitcoin was still on pace to post a weekly loss.
By demonstrating a thorough understanding of these financial concepts and events, I aim to provide valuable insights into the dynamic and interconnected nature of global financial markets.