Hong Kong shares drop 2% as investors look ahead to Fed meeting, U.S. inflation this week

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

Chinese and Hong Kong flags flutter as screens display the Hang Seng Index outside the Exchange Square complex, which houses the Hong Kong Stock Exchange (HKEX), on January 21, 2021 in Hong Kong, China.
China News Service | China News Service | Getty Images

Shares in the Asia-Pacific declined Monday as investors looked ahead to a Fed meeting and U.S. inflation data this week.

Hong Kong's Hang Seng index fell 2.2% to end off at 19,463.63, leading losses in the region. The Hang Seng Tech index shed 4.05% to close at 4,192.67.

In Australia, the S&P/ASX 200 closed down 0.45% to stand at 7,180.8. Japan's Nikkei 225 fell 0.21% to end at 27,842.33 while the Topix slid 0.22% to 1,957.33.

South Korean benchmark Kospi closed down 0.67% at 2,373.02, and the Kosdaq dipped 0.59% to 715.22. The MSCI's broadest index of Asia-Pacific shares outside Japan slipped 1.13%.

Mainland China's Shanghai Composite closed at 3,179.04 after losing 0.63%, and the Shenzhen Component was down 0.673%

On Monday, India is scheduled to release inflation and industrial output data.

Later this week stateside, the Federal Reserve is set to begin its two-day meeting on Tuesday. Economists widely expect the U.S. central bank to raise rates by half a percentage point Wednesday.

The latest reading for the U.S. consumer price index is also slated for Tuesday. Analysts polled by Reuters expect the index rose 0.3% in November.

—CNBC's Patti Domm contributed to this report.

It would be a 'gradual process' before Saudi Arabia accepts Chinese yuan for its crude payments, analyst says

Oil prices could hit more than $100 per barrel in 2023, says UBS
Oil prices could hit more than $100 per barrel in 2023, says UBS

Saudi Arabia is unlikely to accept Chinese yuan as payment for crude exports any time soon and any changes would be "more of a gradual process," UBS Global Wealth Management said.

The bank's commodity analyst Giovanni Staunovo told CNBC's "Capital Connection" that while it "makes sense" for China as the largest crude importer and Saudi Arabia as the largest exporter to "work together," he noted that there were already previous targets to connect oil prices to the euro or gold prices.

Staunovo added that another disinclination is due to the Saudi riyal's peg to the U.S. dollar.

"As long as that [peg] stays in place I don't think the Saudis have incentive to move to the yuan as a currency to price the barrels of oil more meaningfully."

— Lee Ying Shan

India's tech job market is likely to get 'a little' worse before it gets better, Foundit CEO says

India's tech job market is likely to get 'a little' worse before it gets better, Foundit CEO says
India's tech job market likely to get worse before it gets better: Foundit

Tech companies in India have slowed hiring, said Sekhar Garisa, CEO of Foundit, formerly the Asia-Pacific and Middle East businesses of job search platform Monster.

Startups in India have slashed almost 18,000 jobs since the beginning of the year, mostly in education tech, e-commerce and consumer services, according to a report published by Inc42.

"I do expect it to get a little worse before it gets better," Garisa told CNBC's "Squawk Box Asia" on Monday.

While the number of tech jobs jumped nearly 8% in the first six months of 2022, Garisa said the number of openings has dropped considerably in the second half.

"Now we're pretty much looking at flat compared to a year ago," he said. "So the jobs have been going down, [and] we do expect it to go down a bit further."

— Charmaine Jacob

China could reportedly reopen border with Hong Kong before Lunar New Year

China may scrap quarantine requirements for Hong Kong residents traveling to the mainland before Lunar New Year next month as part of the latest slew of reopening measures, South China Morning Post reported, citing official sources familiar with the matter.

The proposal would be part of a "large-scale" pilot scheme, which two mainland sources told SCMP, could stand "a good chance" of starting before the Lunar New Year break which begins Jan. 22. 

Hong Kong and mainland China's border had been closed since February 2020.

Hong Kong-listed travel stocks rose with Cathay Pacific climbing 1.78%, China Eastern Airlines adding 4.19%, and Air China up 1.39%.

— Lee Ying Shan

Southeast Asian markets are in for a 'bungee jump' in 2023, according to JPMorgan

Southeast Asian markets will move in a trajectory resembling that of a "bungee jump" next year — taking a plummet before surging in the second half of 2023, JPMorgan wrote in a report.

That is likely to bee characterized by a "sharp fall followed by a rapid increase in altitude (bear market rally) followed by another decline until eventually markets come to rest at rock-bottom," analysts led by Rajiv Batra wrote.

They attributed that to weakened purchasing power in light of monetary policy tightening, lower savings and the higher cost of borrowing.

Additionally, JPMorgan forecasts the MSCI ASEAN Index will "re-test this year's lows and potentially move even lower" in the first half of 2023, on the back of tightening financial conditions and weaker external demand, among other factors.

The MSCI ASEAN index plunged 22% from February's high to the year's lowest in October, but rebounded 10%.

— Lee Ying Shan

Janet Yellen sees much lower inflation by end of 2023, but says recession risks remain

US Treasury Secretary Janet Yellen speaks at the Bureau of Engraving and Printing Western Currency Facility on December 8, 2022 in Fort Worth, Texas.
Andy Jacobsohn | Afp | Getty Images

U.S. Treasury Secretary Janet Yellen foresees a "substantial reduction in inflation" by the end of next year, provided there's no "unanticipated shock."

Yellen, speaking in an interview on CBS' "60 Minutes," premised her optimism on shipping costs and gas prices coming down.

She cautioned, however, that recession risks remain and that the economy is still prone to shocks. But she said this could be buffered by a "very healthy" banking system, as well as business and household sectors.

"There's a risk of a recession. But it certainly isn't, in my view, something that is necessary to bring inflation down."

The latest reading for the U.S. consumer price index is expected Tuesday. Analysts polled by Reuters expect the index rose 0.3% in November. Before this, October's consumer price index inched up less than expected. Even with the slowdown in the inflation rate, it still remains well above the Fed's 2% target.

—Lee Ying Shan

Oil prices climb more than a dollar on Moscow's threat to cut output

Oil prices rose more than a dollar on the back of further China reopening optimism and Moscow threatening to slash oil production in retaliation for price caps on Russian crude exports.

In early Asia hours, Brent crude futures rose 1.53%, or $1.11 to $72.13 a barrel, while U.S. marker West Texas Intermediate futures traded up 1.29%, or close to a dollar at $77.08 a barrel.

Russian President Vladimir Putin on Friday told reporters in the Kyrgyz capital of Bishkek that Russia "simply will not sell" to countries imposing the West's price cap on Russian oil, Reuters reported.

– Lee Ying Shan

CNBC Pro: Shares of this under-the-radar global miner are set to rally 50%, analyst says

Shares in a little-known London-listed miner are set to rise by 50%, according to Ben Davis, a mining analyst at Liberum Capital.

The company, which extracts metals such as platinum, palladium, and chrome, also offers an 8% dividend yield.

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: Dan Niles is betting the S&P 500 will hit a new low in 2023. Here’s how he is trading it

Dan Niles' Satori Fund is beating the market this year. He shares what's behind the outperformance and how he's trading the market as recession looms.

Pro subscribers can read more here.

— Zavier Ong

Futures fall slightly

Stock futures have slowly declined throughout the first hour of trading. Dow futures are down about 50 points, or around 0.2%, while Nasdaq 100 futures have dipped about 0.3%.

— Jesse Pound

Wall Street coming off losing week

The major averages fell on Friday to clinch a losing week, snapping a two-week winning streak for Wall Street.

Here are the key stats from last week:

  • The Dow fell 2.77%, suffering its worst stretch since September.
  • The S&P 500 fell 3.37%, suffering its worst stretch since September.
  • The Nasdaq composite fell 3.99%, suffering its worst weekly stretch in a month.
  • The Russell 2000 fell 5.08%, marking the worst week since September for small caps.
  • All 11 sectors were negative for the week, led to the downside by energy.

—Jesse Pound, Christopher Hayes