Asia-Pacific markets trade mixed; dollar index reaches new two-decade high

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Shares in the Asia-Pacific traded mixed on Monday as the U.S. dollar strengthened sharply in Asia trade. Oil prices rose more than 2% ahead of an OPEC+ meeting slated to take place Sept. 5. The G-7 reached an agreement to put a cap on Russian oil prices over the weekend.

Hong Kong's Hang Seng index fell 1.1% in the final hour of trade, leading losses regionally with electric vehicle and tech stocks weighing on the index. In Japan, the Nikkei 225 slipped 0.11% to close at 27,619.61 and the Topix index was fractionally lower at 1,928.79.

The Shenzhen Component in mainland China dipped 0.202% to 11,678.69, but the Shanghai Composite rose 0.42% to 3,199.91.

China's Caixin Services Purchasing Managers' Index came in at 55.0, compared with July's print of 55.5.

In South Korea, the Kospi shed 0.24% to 2,403.68 while S&P/ASX 200 in Australia gained 0.34% to 6,852.20. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.55% lower.

Oil prices rise more than 2%; IEF says non-OPEC+ states need to boost production

There's a 'false calm' about oil markets, says International Energy Forum's secretary-general
There's a 'false calm' about oil markets, says International Energy Forum

IEF Secretary General Joseph McMonigle said actors other than just the OPEC+ need to start increasing oil production.

"A lot of people think the gap between supply and demand is all OPEC or OPEC+, but half of that is still from U.S. producers who are not coming in and who are not producing at the same levels they were pre-Covid," he elaborated.

McMonigle added the greatest challenge of imposing oil price cap on Russia proposed by the G-7 is "getting countries like India and China, and Russia of course, to participate."

Brent crude futures climbed 2.9%, to $95.72 a barrel while U.S. West Texas Intermediate crude futures also rose 2.62% to $89.16 a barrel.

— Lee Ying Shan

Nuclear power can help Japan become energy self-sufficient, says minister

Nuclear reactivation could make Japan more self-sufficient, says minister
Nuclear reactivation could make Japan more self-sufficient, says minister

Reactivating nuclear plants in Japan will make it possible for the country to be self-sufficient and ensure energy security, said Japan's Minister of Economy, Trade and Industry Yasutoshi Nishimura.

"If Japan reactivates one nuclear plant, it produces one million tons' worth of energy, making it possible for Japan to have secure energy and potentially be self-sufficient," Nishimura said at the G-20 ministers' meeting in Indonesia on Saturday.

Japan currently imports about 94% of its energy supply.

"I believe that nuclear power is important as we work towards carbon neutrality while ensuring energy security. We are in the direction of planning to increase the overall dependency level in nuclear energy," he said.

The minister added that Japan has secured 10 plants for reactivation, and is working towards reactivating seven more from next year onwards. The minister emphasized the importance of safety while acknowledging the 2011 Fukushima Daiichi Nuclear Power Station accident.

— Lee Ying Shan

Singapore and Thailand to be first hit on U.S. recession, economists warn

Singapore and Thailand are likely to be impacted first by a U.S. recession than the rest of the region, economists told CNBC.

Senior economist Chua Hak Bin at Maybank said Singapore's export dependency and its small and open economy plays a significant factor.

Thailand's tourism sector will also be one of the first to be impacted if the U.S. falls into a recession, Chua said, adding another "wildcard" would be when China reopens its borders.

Read the full story here.

— Charmaine Jacob

Dollar index marks 110, hits highest level since 2002

The U.S. dollar index hit 110.086 in Asia's morning trade, reaching a new two-decade high.

The Japanese yen weakened further to 140.3 after touching a 24-year low last week. The Korean won was at 1,370.87 against the greenback, a level not seen since April 2009.

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— Jihye Lee

CanSino Biologics rise after inhaled vaccine gets emergency use approval in China

CanSino Biologics rose as much as 14.5% after its inhaled Covid vaccine received emergency usage approval in China over the weekend.

The company announced its approval from the Chinese drug regulator to use its recently developed inhaled vaccine as a booster dose.

in its latest earnings release reported a 69.45% drop in revenue in the first half of this year compared with the same period a year ago, as the demand for Covid shots declined globally.

CanSino's shares were last 4.7% higher after paring some gains.

— Jihye Lee

Japanese service sector activity declines first time since March

The au Jibun Bank Japan Services Purchasing Managers' Index dropped to a seasonally adjusted 49.5 for August, lower than 50.3 in July.

The marginal decline marks the first contraction in service sector business activity since March, S&P said in the report, citing the recent spike in Covid cases in the nation.

"With Japan now facing its seventh and most serious wave of the pandemic, strong cost pressures and a worsening global economic outlook, it's likely that Japan's private sector will remain under pressure in the months ahead," said Annabel Fiddes, economics associate director at S&P Global Market Intelligence.

— Jihye Lee

Caixin services PMI show Chinese services activity grew in August

China's Caixin Services Purchasing Managers' Index for August came in at 55.0, compared with July's print of 55.5.

The official non-manufacturing PMI for August is 52.6.

PMI readings are sequential and represent month-on-month expansion or contraction, where the 50-point mark means no change from the month before.

— Abigail Ng

CNBC Pro: This tech stock is up nearly 20% over the past year — and one pro says it’s got further to go

Tech stocks have endured a difficult year so far, with some of the biggest names deep in the red.

But one cybersecurity firm has stood out for its relative resilience, and market veteran Nancy Tengler believes the stock is just getting started.

Tengler, who is CEO and chief investment officer of Laffer Tengler Investments, said her bullishness on the firm might be construed as a "controversial," but argued that it is in fact a safer bet within the tech space.

Pro subscribers can read more here.

— Katrina Bishop

Australia's business activity expands at slowest rate in seven months

The seasonally adjusted S&P Global Australia Services PMI Business Activity Index came in at 50.2 in August, lower than July's 50.9, marking the slowest rate of growth in seven months.

The S&P Global report noted overall demand only grew marginally in August.

"August's sluggish expansion in business activity was a sign that inflationary pressures and recent interest rate hikes were weighing on sales," Laura Denman, economist at S&P Global Market Intelligence, said in a press release.

Despite inflationary pressures easing from record highs seen earlier this year, overall business confidence has reached the lowest level since April 2020, the report said.

— Jihye Lee

CNBC Pro: Mohamed El-Erian reveals where to invest right now

Allianz's El-Erian: Sovereign bond valuations are 'getting there,' but look for alternatives
Allianz's El-Erian: Sovereign bond valuations are 'getting there,' but look for alternatives

With stock and bond valuations falling concurrently, investors should be looking to get out of "distorted markets," according to Mohamed El-Erian, chief economic adviser to Allianz.

"There was a time when all asset prices went up — stocks and bonds — and we forgot about correlations. Why care about correlations when you're being paid for holding both risk assets and risk mitigating assets? It's a lovely world," he told CNBC's Steve Sedgwick Friday.

""But the first half taught us, and what we have again learned since the middle of August, [is] that they can both go down at the same time."

Investors seeking alternatives have a couple of options, El-Erian says.

CNBC Pro subscribers can read more here.

— Elliot Smith and Katrina Bishop

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