Shenzhen stocks drop 2% in mixed Asia markets; China keeps medium-term rates steady

This is CNBC's live blog covering Asia-Pacific markets.

A woman walks by the gate of the Shenzhen Stock Exchange on August 20, 2020 in Shenzhen, Guangdong Province of China.
VCG | Visual China Group | Getty Images

Shares in the Asia-Pacific traded mixed on Thursday after Wednesday's negative session, with stocks in Shenzhen and Shanghai falling sharply.

Mainland China's Shenzhen Component fell 2.105% to 11,526.96, dragged down by energy stocks. The Shanghai Composite shed 1.16% to 3,199.92, while the Hang Seng index in Hong Kong added 0.44% to 18930.38.

The Nikkei 225 in Japan rose 0.21% to 27,875.91 and the Topix index was 0.15% higher at 1,950.43. The Japanese yen was last trading at 143.69 against the dollar after a reported "rate check" by the Bank of Japan.

In South Korea, the Kospi closed 0.4% lower at 2,401.83 and Australia's S&P/ASX 200 gained 0.21% to 6,842.90.

In China, the central bank kept its one-year medium-term lending facility (MLF) unchanged at 2.75%, as expected. Australia's unemployment rate for August came in at 3.5%, slightly higher than July.

U.S. indexes inched higher overnight and the producer price index showed a decrease in wholesale prices of 0.1% in August amid inflation fears.

Chinese yuan could weaken past 7 against the dollar by year-end, says Credit Suisse

Chinese yuan could depreciate to 7.05 against the dollar by year-end, says Credit Suisse
Yuan could depreciate to 7.05 against the dollar by year-end: Credit Suisse

The Chinese yuan could weaken to 7.05 against the U.S. dollar by year-end, said Max Lin, Asia FX and rates strategist at Credit Suisse.

The 7 level is "not really a red line" for the country's central bank anymore, he said, pointing out that the currency crossed that level in 2019, and again in 2020 due to the Covid-19 pandemic.

"I think the real red line for them is 7.15," Lin said. "Because at that point, that's when you start getting multi-decade lows."

The yuan now stands at 6.9806 against the greenback.

— Charmaine Jacob

CATL, BYD dragging down the Shenzhen Component index

Shenzhen-listed shares of the world's largest battery maker, Contemporary Amperex Technology (CATL), slipped 3.86% in the morning session, dragging down the broader index.

BYD's shares in Shenzhen also dropped 3.3%.

New energy stocks including Sungrow Power Supply and TCL Zhonghuan Renewable Energy Technology were also weighing on the index.

— Abigail Ng

Oil prices edge higher on potentially renewed China demand

Oil prices inched higher on Thursday on the potential of renewed demand from China after Chengdu announced to ease lockdown measures.

Brent crude futures climbed 0.4% to stand at $84.48 per barrel, while U.S. West Texas Intermediate rose 0.5% to $88.94 per barrel.

Traders are eyeing potential disruptions to crude and product deliveries as U.S. railroad unions threaten to go on a strike ahead of a Friday deadline.

— Lee Ying Shan

Japan reports record trade deficit, economist says weak yen helping exports

Japan reported a record trade deficit in August – exports grew 22.1% and imports soared 49.9% this month compared with a year ago, according to official data.

The trade deficit was 2.82 trillion yen ($19.6 billion), the largest on record according to Refinitiv Eikon.

The weaker yen has helped Japan's exports, but the cost of imports "are through the roof," Martin Schulz, chief policy economist at Fujitsu said on CNBC's "Squawk Box Asia."

Real economies are slowing "almost everywhere," he added, and that will affect Japan's exporters as well.

— Abigail Ng

CNBC Pro: Want higher returns? Kevin O'Leary says put your money in 'harm's way' — and shares his stock picks

Billionaire investor Kevin O'Leary believes market volatility is back, and thinks investors will have to take on some risks to get higher returns.

"If you want to get a 6% to 8% return, you're going to have to put some money in harm's way," he told CNBC "Street Signs Asia" on Wednesday.

He names the stocks and sectors he likes to navigate the current volatility.

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— Zavier Ong

China holds key rate, state media reports banks cut deposit rates

The People's Bank of China kept the rate for one-year medium-term lending facility loans (MLF) unchanged at 2.75%, while partially rolling over some maturing loans.

That was in line with analysts' expectations, according to a Reuters poll.

Separately, Chinese state media reported that some banks will be cutting deposit rates, citing sources.

Hong Kong-listed shares of China Merchant Bank were 4.7% higher in morning trade following the report – Ping An Bank's shares in mainland China rose 2.514% and Xiamen Bank's stock gained 3.534%.

— Abigail Ng

Australia adds 33,500 jobs in August

Australia added 33,500 jobs in the month of August, a 0.2% increase from July in seasonally adjusted terms. Net employment declined in July.

The nation's unemployment rate rose to 3.5%, with the youth unemployment rate at 8.4% for the month.

The market participation rate is at 66.6%, marginally higher than the previous month's 66.4%.

–Jihye Lee

U.S. 2-year Treasury yields hits 3.8% again

The U.S. 2-year Treasury note briefly rose to 3.8% again after reaching its highest level since November 2007 earlier this week.

Short-term bond yields, which are most sensitive to Fed policy, soared following the U.S. inflation report on Tuesday.

The yield on the benchmark 10-year Treasury was also at 3.41% and the yield on the 30-year Treasury bond was at 3.46%.

Yields move inversely to prices, and a basis point is equal to 0.01%.

–Jihye Lee

New Zealand's growth recovery driven by transport, data shows

Gross domestic product in New Zealand rebounded in the June 2022 quarter, growing 1.7% after shrinking 0.2% in the previous quarter, official data showed.

Transport, postal, and warehousing jumped 19.7%, driven by air transport and transport support services, while arts, recreation and other services grew 9%.

New Zealand eased Covid restrictions earlier this year, including loosening entry requirements for tourists.

— Abigail Ng

CNBC Pro: Morgan Stanley says the S&P 500 is set for a comeback by year-end. These are its top stock picks

U.S. markets had a meltdown on Tuesday — the worst since June 2020 — following yet another hot inflation report. But that may not last for long, according to Andrew Slimmon of Morgan Stanley Investment Management, who says the S&P 500 could enjoy upside by year-end.

He predicts the level that the S&P 500 will rise to by the year end, and also picks stocks to buy into the "fear."

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— Weizhen Tan