Asia markets mixed as investors weigh more Wall Street earnings
This is CNBC's live blog covering Asia-Pacific markets.
Asia-Pacific markets were mixed on Thursday as investors on Wall Street digest more earnings reports from names like Netflix, IBM and Morgan Stanley.
While many of the companies reporting topped analysts' low-bar estimates, a lack of forecasts from the major companies also left investors on edge.
Japan's Nikkei 225 gained 0.18% to end at 28,657.57, and the Topix marginally fell to end at 2,039.73 as Japan's trade deficit hit a record high of 21.7 trillion yen ($161.14 billion) for its full fiscal year ending March.
In Australia, the S&P/ASX 200 was down 0.04% to finish at 7,362.2, while South Korea's Kospi slid 0.46% to end at 2,563.11 and the Kosdaq dipped 2.58% to close at 885.71.
Mainland Chinese markets were also all down, with the Shanghai Composite down 0.09% to end the day at 3,367.03. The Shenzhen Component closed 0.37% lower at 11,717.26.
Hong Kong's Hang Seng Index was up marginally, but the Hang Seng Tech index was down 0.1%.
Overnight in the U.S., the S&P 500 finished little changed Wednesday and inched 0.01% lower, while the Nasdaq Composite eked out a 0.03% gain. The Dow Jones Industrial Average slid 0.23%.
— CNBC's Samantha Subin and Brian Evans contributed to this report
TSMC reports higher profit and revenue for first quarter of 2023
Taiwan Semiconductor Manufacturing Co. has reported a 2.1% year-on-year rise in net profit to NT$206.9 billion ($6.76 billion) for the first quarter of 2023. Revenue for the quarter also climbed 3.6% year-on-year to NT$508.6 billion.
However, on a quarter-on-quarter basis, revenue fell 18.7% and net profit slid by 30% compared to the fourth quarter of 2022.
In an earnings release, the company explained that the revenue slump was due to its business being impacted by "weakening macroeconomic conditions, continued end market demand softness, and customers' inventory adjustment."
TSMC also said that revenue from its advanced technologies segment - comprising 7 nanometer chips and below - contributed to 51% of its revenue in the first quarter.
Meanwhile, customers based in North America made up 63% of its total revenue, while China was its next largest revenue base at 15%.
Shares of TSMC traded 0.59% up on Thursday.
— Lim Hui Jie
China regulators plan new bond market rules after market turmoil: Reuters
Chinese authorities learnt lessons after turmoil roiled the country's bond market last month due to a data feed ban, Reuters reported, following plans to "reshape" the country's bond market.
On March 15, interdealer brokers were suddenly banned from providing real-time bond price data to Chinese financial information platforms.
Citing sources with knowledge of the matter, Reuters said the episode also exposed a lack of coordination between various regulatory bodies. This includes the China Banking and Insurance Regulatory Commission, or CBIRC, as well as China's central bank.
"After the chaos, coordination between bodies will be strengthened," one of the regulatory sources said. Chinese authorities have not commented publicly on the reasons for their actions.
— Lim Hui Jie
There's still 'headroom' for us to grow in our international markets, says Tata Communications
There is still "headroom" for Tata Communications to expand internationally, the company's CEO Amur Lakshminarayanan said.
"We still think our international markets have a lot more headroom for us to grow because we are a very small part of what other incumbents do," Lakshminarayanan told CNBC's "Street Signs Asia" on Thursday.
"We are going to take more market share from others, rather than expanding the market," he added.
Lakshminarayanan highlighted that Tata Communications is thrilled and excited about the company taking shape as a "digital fabric," and how it has helped customers both in India and globally.
– Charmaine Jacob
Australia's central bank to get separate board to manage monetary policy after review
Australia's central bank is set to get a new board to manage monetary policy that will have a majority of independent expert members.
The Australian government released a report for its review of the Reserve Bank of Australia, set up in July 2022 by Treasurer Jim Chalmers.
Among its recommendations was one that the RBA's current single board be split into one for monetary policy and one for governance.
Most notably, the recommendations also called for the repeal of the government's power to override decisions of the Reserve Bank Board, the report said, saying it was 'to further support the RBA's monetary policy independence."
The full recommendations are due to be implemented by July next year.
— Lim Hui Jie
Apple's reliance on China will remains for 'years' to come
Tim Cook has bet big on India as Apple shifts its focus away from China and expands its footprint in the fifth largest economy.
Still, analysts told CNBC the iPhone-maker's dependency on China will remain for years to come.
There's potential for India to "become the next China" for Apple production, but it could take as long as a decade before it happens, said Martin Yang, senior analyst of emerging technologies at Oppenheimer & Co.
It is also highly unlikely that Apple will be able to completely eradicate its reliance on China, said Navkendar Singh, an associate vice president with International Data Corporation (IDC) India.
"Given the cost scales, logistics, and sheer inertia of some of the suppliers in the ecosystem in China, it's very unlikely that Apple can completely remove itself from China," Singh highlighted.
The technology giant currently manufactures 5% to 7% of its iPhones in India, a leap from just 1% in 2021 — and there's no stopping there with further plans in the works to increase the company's prominence in the country.
Read the full story here.
— Charmaine Jacob
China keeps 1-year and 5-year loan prime rates at same level since August
The People's Bank of China kept its loan prime rates for 1-year and 5-year loans at 3.65% and 4.3% respectively.
The country's benchmark lending rates have remained unchanged since August 2022.
The 1-year rate affects new loans, while the 5-year rate influences mortgages.
China reported Monday its economy grew 4.5% in the first quarter of the year, beating the 4% forecast in a Reuters poll.
— Yeo Boon Ping
It's critical for China to 'buoy' the market and give foreign investors confidence: MSA Capital
China is giving foreign investors the confidence to put their money in the country, said Ben Harburg, managing partner at MSA Capital, a global private equity and venture capital firm.
"It's critical for regulators to buoy the market and to make global investors feel confident here," said Harburg on CNBC's "Street Signs Asia" Thursday.
"China is making it much easier today for foreign asset managers to bring their money directly [into] the country from Qualified Foreign Limited Partnership rather than partnering with local groups, such as HSBC and Ping An in that instance," said Harburg.
HSBC put out a statement on Thursday about Ping An's proposal of a minority listing of HSBC's Asia-Pacific businesses or a consolidation of HSBC's Asia-Pacific businesses under a single listing, saying that it would result in material loss of value for shareholders.
"I expect to see more Chinese pushback to these forms of restructuring or more and more pushback from the Western firms as well because they now realize they can access the market directly without working with a local asset manager," said Harburg.
— Sheila Chiang
Japan core inflation expected to hold steady at 3.1% for March
Japan's core annual inflation rate is expected to come in at 3.1% for March, according to a Reuters poll.
This is unchanged from the same figure in February, and comes after the inflation rate in Japan fell to 3.1% in February, down from January's 41-year high of 4.2%.
Japan's core inflation excludes the cost of fresh food from the headline inflation figures, which stood at 3.3% in February.
If the March figures come in as expected, core consumer inflation would exceed the Bank of Japan's 2% target for twelve straight months.
— Lim Hui Jie
Spinning off Asian business ‘would result in material loss of value for HSBC shareholders’: HSBC
HSBC has recommended that shareholders vote against spinning off its Asian business, which was proposed by its largest investor Ping An Asset Management.
In a note released Wednesday, the bank highlighted four reasons behind its recommendation.
First, "separation is not consistent with HSBC's business model," which is an integrated bank. Second, there would be "meaningful revenue dis-synergies," such as less coordinated customer service.
Next, splitting up the bank would also incur "material one-off and ongoing running costs," such as tax leakage and the need for increased capital. Last, any separation would involve "execution risks," creating a "multi-year period of uncertainty."
Ping An has been pushing for HSBC to split up its Asian business to boost the bank's returns. "HSBC Group has drained HSBC Asia of dividends and growth capital to support its relatively low return non-Asia businesses," Ping An said in a statement Tuesday.
— Yeo Boon Ping
Japan trade deficit hits 21.7 trillion yen for full year ended March 2023
Japan's trade deficit reached a record high of 21.7 trillion yen ($161.14 billion) for the twelve months ending March, a sharp spike from the 5.59 trillion yen recorded in the same period a month ago.
Exports from April 2022 to March saw a 15.5% increase year on year to reach 99.2 trillion yen, while imports increased to 120.95 trillion yen.
For March alone, Japan's exports rose 4.3% year on year, lower than the 6.5% recorded in February, while imports rose 7.3% in the same period, lower than February's 8.3% gain.
Japan's trade deficit in March narrowed to 754.5 billion yen, down from a deficit of 897 billion yen in February.
— Lim Hui Jie
CNBC Pro: UBS names the global stocks to buy amid sluggish growth and sky-high inflation
Investment bank UBS has identified global stocks to buy in what could be a year of "slowflation" — a combination of sluggish growth and sky-high inflation.
The Swiss bank's strategists said they expect weak global growth at 2.6% in 2023, compared to the 50-year average of 3.5%. They also said slower-than-expected progress was being made in bringing core inflation toward central bank targets.
CNBC Pro subscribers can read more here.
— Ganesh Rao
New Zealand's first quarter inflation lower than expected at 6.7%
New Zealand's inflation rate for the first quarter slowed to 6.7% on a year on year basis, lower than economists expectations of 7.1% and the previous quarter's figure of 7.2%.
The country's statistics department revealed that food costs were the largest contributor to inflation in the first quarter, increasing 11.3% compared to the same period last year.
Earlier this month, the Reserve Bank of New Zealand raised rates by 50 basis points in a surprise move, bringing its benchmark interest rate to 5.25%.
— Lim Hui Jie
CNBC Pro: The 'real leader' in the S&P 500 isn't Apple or Microsoft — it's this stock, analyst says
Tech has been a bright spot in a volatile market this year.
"The leaders this year are definitely Apple and Microsoft," Louis Navellier, chairman at Navellier & Associates, told CNBC's "Street Signs Asia" on Wednesday. "They are now the highest weightings ever in the S&P 500."
But he argued that the "real leader" in the S&P 500 is another stock. He also gave three other stock picks with high expected earnings growth.
CNBC Pro subscribers can read more here.
— Weizhen Tan
So far, first-quarter earnings are beating market fears
Earnings season has kicked off on a positive note, with 10% of the broader index reporting better-than-expected earnings. Of the 53 companies in the S&P 500 reporting so far, 83% have beat Wall Street's expectations by 6%. Both of those rates are above average.
The broad-based index has seen a modest uptrend in the last few weeks, gaining 7% since it reached a bottom at the height of the banking crisis in mid-March.
— Pia Singh
Fed's 'Beige Book' notes stresses from banking troubles
The banking crisis in March took its toll on financial activity, particularly in the New York and San Francisco regions, according to the Federal Reserve's periodic economic review released Wednesday.
Since the last release, on Jan. 18, of the Fed's "Beige Book," banking and in some cases commercial real estate saw a substantial pullback of activity." That followed the collapse of Silicon Valley Bank and two other institutions due to a run on deposits.
"Lending volumes and loan demand generally declined across consumer and business loan types" nationally, the report noted.
In the San Francisco area, "Residential and commercial real estate activity fell, and lending activity declined substantially," while "Lending activity decreased substantially. Communities across the Twelfth District faced heightened challenges in their ability to provide food, shelter, and services due to credit constraints and reduced philanthropic giving."
In New York, "Conditions in the broad finance sector deteriorated sharply coinciding with recent stress in the banking sector."
Fed lending facilities put into place have helped stem some of the damage from the failure of SVB and ensuing bank stress.
The report otherwise noted only that overall economic activity was little changed since the last filing.
Technology stocks fall
Technology stocks showed signs of early weakness Wednesday, with the S&P 500's information technology and communication services sectors housing many popular names last down 0.8% and 1.1%, respectively.
Netflix led some of the sector's losses, last down 4% as the streaming giant posted mixed results and pushed out plans to mitigate password sharing. The streaming giant was the biggest drag on communications services, followed by Fox and Walt Disney, falling more than 2% each.
Microsoft and Alphabet each declined 1%, while Meta Platforms moved 1.7% lower. Tesla, slated to report earnings after the bell, lost 2.7%.
Amazon was the only major big technology player in the green, last up about 0.6% amid news of job cuts in its advertising unit.
— Samantha Subin
Morgan Stanley shares fall despite better-than-expected results
Morgan Stanley posted earnings per share of $1.70 for the first quarter, greater than the $1.62 estimate from analysts polled by Refinitiv. Overall revenue came in at $14.52 billion, above the $13.92 billion consensus estimate from Refinitiv as equities and fixed income trading units performed better than expected.
One growth area was wealth management, where revenue increased by 11% from a year ago.
The shares, which are outperforming most other banks this year, eased by 2% in early trading despite the positive results.
"The investments we have made in our wealth management business continue to bear fruit as we added a robust $110 billion in net new assets this quarter," said Chairman and CEO James Gorman in the earnings release. "Equity and fixed income revenues were strong, although investment banking activity continued to be constrained."