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Asia markets higher as China cuts reserve requirement; Hong Kong halts trading as typhoon approaches

Lee Ying Shan
Lim Hui Jie

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

People walk along a promenade next to Victoria harbour in Hong Kong on August 31, 2023, a day before the arrival of Typhoon Saola. (Photo by ISAAC LAWRENCE / AFP) (Photo by ISAAC LAWRENCE/AFP via Getty Images)
Isaac Lawrence | Afp | Getty Images

Asia-Pacific markets largely traded higher as China's factory activity for August expanded and the central bank announced a cut in reserve requirements to boost the economy.

Chinese stocks traded higher after China's factory activity expanded in August, surprising on the upside, according to a private-sector survey. The CSI 300 was up 0.7%, while the Shanghai Composite traded higher by 0.43% and the Shenzhen Component rose 0.44%.

The Caixin/S&P global manufacturing purchasing managers' index rose to 51.0 in August, better than the 49.3 that analysts polled by Reuters expected.

Also on Friday, the People Bank of China said it would reduce the foreign exchange reserve requirement ratio for financial institutions by 200 basis points — starting from Sept. 15.

In Australia, the S&P/ASX 200 lost 0.37%, snapping a four-day winning streak to end at 7,278.3 on Friday. South Korea's Kospi rose 0.29% and closed at 2,563.71, while the Kosdaq declined 0.93% to end at 919.74.

In Japan, the Nikkei 225 was up 0.28% to close at 32,710.62, while the Topix climbed 0.76% to finish at 2,349.75.


Hong Kong's financial markets, schools and most businesses were closed Friday as the Asian financial hub braced for Super Typhoon Saola. "All trading sessions today [Friday] in the securities and derivatives markets, including after-hours trading session, have been canceled," Hong Kong Exchanges & Clearing said.

As of 1.45 p.m. Singapore/Hong Kong time, the Hong Kong Observatory maintained that the Storm Signal No. 8 was still in force, and added that depending on the changes in local winds, a higher tropical cyclone warning signal could be issued between 6 p.m. and 10 p.m. Hong Kong time.

Singapore's financial markets will be closed today as the country heads to the polls to vote for its ninth president.

Overnight in the U.S., the Dow Jones Industrial Average fell by about 168 points, or 0.5%, to close at 34,721.91. The S&P 500 ticked down nearly 0.2% to 4,507.66. The Nasdaq Composite ticked higher at the closing bell, but still suffers worst month in 2023.

Samsung Electronics shares jump over 6% after it announces new memory chip

Shares of South Korean electronics giant Samsung Electronics gained as much as 6.12% on Friday after the company announced that it had developed the first 32-gigabit DDR5 DRAM chip using 12 nanometer class process technology. 

DRAM refers to dynamic random access memory, typically used for the data or program code needed by a computer processor to function. 

Samsung said this will enable DRAM modules of up to 1-terabyte, "allowing us to be ideally positioned to serve the growing need for high-capacity DRAM in the era of artificial intelligence and big data."

— Lim Hui Jie

China's major banks slash rates on yuan deposits

Five of China's largest banks have cut interest rates on yuan deposits, Reuters reported. They include the Industrial and Commercial Bank of China, China Construction Bank Corp and Agricultural Bank of China.

It comes on the same day the People's Bank of China said it will reduce the foreign exchange reserve requirement ratio for financial institutions by 200 basis points from Sept. 15.

ICBC cut its one-year yuan deposit rate by 10 basis points to 1.55% and its two-year yuan deposit rate by 20 basis points to 1.85% with immediate effect. Three- and five-year deposit rates were cut by 25 basis points.

Reuters reported BOC cut rates by the same amount as ICBC, adding that the Agricultural Bank of China "made similar reductions."

— Reuters, Lim Hui Jie

South Korea's factory activity contracts at faster pace in August

South Korea's factory activity contracted at a faster pace in August, according to private surveys by S&P Global.

The country's manufacturing purchasing managers index fell to 48.9 from 49.4, marking the 14th straight month where the PMI has remained below the break even level of 50.

A PMI reading above 50 represents an expansion, while a reading under 50 represents a contraction in the sector.

— Lim Hui Jie

Japan factory activity in contraction territory for third straight month in July

Japan's factory activity contracted for a third straight month in August, according to private surveys by the au Jibun bank.

The country's manufacturing purchasing index came in at 49.6, slightly lower than the 49.7 in the flash estimates last week and unchanged from the July figure.

"Weak client confidence and subdued economic conditions reportedly weighed on new orders, though some firms mentioned that new product launches had partially offset the decline," the bank said in a report.

— Lim Hui Jie

China's central bank cuts reserve ratio by 200 basis points

The People's Bank of China announced Friday that starting from Sept. 15, it would reduce the foreign exchange reserve requirement ratio for financial institutions to 4%, from 6%.

The cut follows a number of reductions to various interest rates in the last several weeks in an effort to shore up the economy.

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The PBOC on Friday set the midpoint of the yuan against the U.S. dollar at 7.1788, a touch stronger than the 7.1811 on Thursday, according to Wind Information.

The offshore-traded yuan weakened past 7.24 yuan versus the greenback, according to Wind.

— Evelyn Cheng

CNBC Pro: September is the cruelest month for stocks. The pros share their trading tips — and what to buy

August has been a choppy month. September, a historically stormy month, may not be any better.

The pros weigh in on how investors can trade in the month ahead and share stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Hong Kong financial markets halt trading as city braces for Super Typhoon Saola

Trading in Hong Kong has been delayed as Super Typhoon Saola approaches, the Hong Kong Exchanges and Clearing Limited (HKEX) said.

If a Storm Signal No.8 or above remains issued at 9 a.m. Singapore/Hong Kong time, the morning trading sessions for all markets will be cancelled, HKEX said in a statement.

As of 7.45 a.m., the Hong Kong Observatory noted that Saola is moving closer to Hong Kong, and expects the "weather will deteriorate rapidly later today." The No. 8 signal is expected to remain in force for most of today.

According to the Hong Kong stock exchange guidelines, trading will be halted if the No. 8 signal or above is issued before pre-opening and will remain in place until 12 p.m.

— Lee Ying Shan

CNBC Pro: 'Very robust strategy': Fund manager makes a case for dividend stocks and names 5 to buy

Dividend stocks aren't evergreen, but investing in them over several years can pay off, according to one portfolio manager.

Their underperformance this year presents an opportunity, said Ben Kirby, who is also co-head of investments at Thornburg Investment Management.

He names five stocks to buy.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Nasdaq notches worst month since December

August marked a difficult time for technology stocks, with the Nasdaq Composite and Nasdaq-100 notching their worst months since December 2022.

For the month, the Nasdaq Composite slumped about 2.2%, while the Nasdaq-100 finished 1.6% lower.

The biggest laggards included software stocks Fortinet and Datadog, down 22.5% and 17.3% on the month, respectively. JD.com shares lost 19.6%, while Lucid Group and PayPal shaved off more than 17% each.

— Samantha Subin