China markets drop as factory activity shrinks; Asia stocks mixed

China's leaders are set to meet on Oct. 16 for a major political event which is expected to pave the way for President Xi Jinping to secure an unprecedented third term.

The meeting has taken on greater significance this year as observers watch closely to see if Beijing will start easing its stringent zero-Covid policy. The meeting is expected to send signals on forthcoming economic policy.

It's "the most important political event of the decade in China," Citi analysts wrote in a note last week.

— Evelyn Cheng

Shares of Indonesia's biggest tech company GoTo fell as much as 6.79% after posting heavy losses for the first half of 2022.

CEO Andre Soelistyo in Tuesday's webcast warned of a more volatile market to come.

"2022 has been a volatile year in our market and the macro conditions driving this may persist for some time," he said. "We will remain watchful on how geopolitical tension, rising fuel cost, inflation and high interest rates will unfold."

Reuters reported, citing unnamed sources, that the company is looking to raise $1 billion through a convertible bond issue.

–Jihye Lee

Oil prices are likely to be driven by geopolitical developments rather than supply and demand, S&P Global vice chairman Daniel Yergin told CNBC.

He said there are many "different forces," including China's Covid measures and whether there's an Iran deal or not.

"We're going to be surprised because it's going to be so much governed by events, it's not just about supply and demand," he said.

When asked if Saudi Arabia's talk of a production cut may indicate an imminent nuclear deal with Iran, Yergin said: "Right now, the whispering in Washington is that it's pretty darn close."

Discussions about the deal that would bring oil back onto the market have been like a "yo-yo," he said.

U.S. crude was up 1.08% at $92.63 per barrel, while Brent crude was 0.7% higher at $100.01 per barrel.

— Abigail Ng

Hong Kong-listed shares of BYD fell over 10% after Warren Buffett's Berkshire Hathaway trimmed its stake in the company, according to a filing released Tuesday.

Berkshire sold 1.33 million shares of BYD for about $47 million — the conglomerate now owns 218.7 million shares, or a 19.92% stake, after the sale.

On Monday, BYD reported strong numbers for the first half of 2020 with its net income for the period totaling 3.6 billion yuan ($521 million), tripling from a year earlier.

— Jihye Lee

Correction: This post has been updated to accurately reflect the spelling of Warren Buffett's name.

China's official manufacturing Purchasing Managers' Index for August stood at 49.4, official data showed.

That's the second monthly contraction, but is better than the 49.2 that analysts expected, according to a Reuters poll. The PMI in July was at 49.

PMI readings are sequential and represent month-on-month expansion or contraction. The 50-point mark that separates growth from contraction.

The non-manufacturing PMI came in at 52.6 for August, compared with a reading of 53.8 in July.

— Abigail Ng

Stocks have taken yet another turn lower after U.S. Federal Reserve Chairman Jerome Powell made clear last week that rate hikes are set to continue — even if they cause more pain ahead.

What could drive the next leg down for stocks? Morgan Stanley and Wolfe Research have identified a number of indicators they expect to determine market moves looking ahead.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Travel stocks in South Korea continued to rise for a second day after the South Korean government confirmed reports it would scrap Covid tests for inbound travelers.

Asiana Airlines was up 2.03% and Korean Air also traded 0.96% higher. Travel companies Lotte Tour Development was up 3.6%, Hana Tour traded 0.67% higher and Hotel Shilla was also up 1.08%.

Seoul announced it will lift its current pre-travel test requirements, where visitors must show a negative result before departure to enter the country. The update will take effect Saturday.

–Jihye Lee

Industrial production in Japan unexpectedly rose 1% in July from the month earlier, according to official data.

The latest data beat estimates of a 0.5% contraction predicted by analysts in a Reuters poll, after June's factory output jumped 9.2% as China eased Covid curbs.

Retail sales for July also rose 2.4% compared to the same period a year earlier.

The Japanese yen strengthened slightly and was last at 138.63 against the dollar.

— Abigail Ng

China's government is striving to boost auto sales, and this is likely to benefit electric vehicles more than their petrol-based counterparts, according to Morgan Stanley.

"While China braces for its slowest quarterly economic growth in two years, the car industry is benefiting from multifaceted stimulus offered by central and local governments," the bank's analysts said in a note this month.

They named three buy-rated stocks they expect to get a boost from the measures.

Pro subscribers can read more here.

— Zavier Ong