China stocks pare losses as central bank holds rates; Taiwan stocks rise after elections

India's stock markets started the week with a rally, as the benchmark Nifty 50 index hit a record high at 22,081.95. The index was last up 0.63%.

The BSE Sensex index crossed 73,000 for the first time, trading 0.76% higher on Monday.

The Sensex was up about 18.7% in 2023, while the Nifty was higher by about 20% in the same period. Indian stocks rallied to new highs last year on the back of strong growth prospects, higher domestic participation and optimism ahead of the general elections.

Indian IT companies led the charge for the day.

— Shreyashi Sanyal

Taiwan's new president-elect Lai Ching-te of the ruling Democratic Progressive Party could face challenges in his term as he is seen as a "die-hard separatist" by China, Zhou Bo, senior fellow at Tsinghua University, told CNBC.

"Lai will have a lot of headwinds in the days and the years to come, because he's widely considered a die-hard separatist in the eyes of mainland China," said Zhou on CNBC's "Squawk Box Asia" Monday.

Chinese President Xi Jinping has said China's "reunification" with Taiwan is inevitable, as Beijing frames the election as a choice between "peace and war, prosperity and decline."

"For peace to be maintained in the Taiwan Strait, it requires effort from both Washington and even the DPP. But for peace to prevail, it has to lead to mainland China to believe that peace is still possible," said Zhou.

The Taiwan Weighted Exchange was 0.37% higher at 1:02 p.m. Hong Kong time on Monday, two days after Taiwan voters handed the ruling DPP a third straight presidency.

– Sheila Chiang

Cocoa jumped to its highest in 46 years as supply concerns continue to mount. Cocoa futures surged to $4,323 per metric ton, the highest since September 1977, according to data from FactSet.

Cocoa prices notched large gains last year after West African supplies were hit hard by heavy rains amid other issues including fungal disease.

BMI, a Fitch Solutions research unit, is not expecting significant relief in these supply constraints in 2024. In a recent research note, analysts estimate that cocoa production and quality from main producers Ivory Coast and Ghana could continue to be compromised due to "earlier excess rainfall and crop disease."

— Lee Ying Shan

Shares of Chinese tech firm Baidu slumped over 8% on Monday, following a report in the South China Morning Post that China's military had tested its AI system on Baidu's Ernie Bot, which uses large language models similar to ChatGPT.

The report, which came out late Friday, said that "Chinese scientists are teaching an experimental military artificial intelligence more about facing unpredictable human enemies with the help of ChatGPT-like technologies."

Citing scientists involved in the project, SCMP reported that a research laboratory with the People's Liberation Army's (PLA) Strategic Support Force tested the AI system on Baidu's Ernie and iFlyTek's Spark.

The PLASSF is the space, cyber, and electronic warfare force of the Chinese military.

In response to SCMP, Baidu said Saturday it "has no affiliation or other partnership with the academic institution in question."

— Lim Hui Jie

China's central bank left its medium-term policy loans rate unchanged in a surprise move on Monday, but continued to inject liquidity.

The People's Bank of China said in a release that it held the rate at 2.50% on some 995 billion yuan ($138.84 billion) worth of one-year medium-term lending facility (MLF) loans.

A Reuters poll had expected the PBOC to cut the MLF rate.

A cut in the MLF would have helped boost China's economic recovery.

The CSI 300 index pared some earlier losses to fall about 0.29% following the decision.

— Shreyashi Sanyal

The Taiwan Weighted index started the week 0.5% higher after Lai Ching-te won the island's presidential election on Saturday.

Lai helped secure the Democratic Progressive Party its third straight victory. Seen as a strong China skeptic, Lai won by more than 40% of the popular vote and said he was "determined to safeguard Taiwan from threats and intimidation from China." 

Beijing, which has often labelled Lai as a "stubborn worker for Taiwan independence" and a dangerous separatist, dismissed his victory.

Lai has vowed to remain open-minded in his governing style, but his government is yet to form a parliamentary majority. His victory also sparked worries about frosty China-U.S. relations as well as security in the broader Indo-Pacific region.

Taiwan stocks rose over 26% in 2023, while China's CSI 300 index fell over 11% last year.

— Shreyashi Sanyal

Semiconductor stocks had a good year in 2023, bouncing back from the post-pandemic underperformance of 2022.

The PHLX Semiconductor index (Sox) index surged 65% in 2023, well outpacing the S&P 500.

Banks such as BofA and UBS are still bullish on the semiconductor sector despite its strong run in 2023.

CNBC Pro scoured through recent Wall Street research in January to look for the top 2024 semiconductor picks that analysts named.

Subscribers can read more here.

— Weizhen Tan

Europe's utilities sector may have come under pressure over the past three years, but Goldman Sachs says a shift is underway, naming stocks to play the industry in 2024.

"We believe that the improved outlook on inflation and interest rates is likely to favor capital intensive/long duration assets, such as Renewable Energy (where the capital cycle also appears to have positively inflected, as evidenced by rising returns) and Power Grids (where the market appears to be overlooking the incremental organic growth opportunities)," the bank's analysts wrote.

The investment bank named a bunch of stocks it expects to rise by 30%.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

U.S. crude oil prices on Friday followed a familiar pattern in response to mounting Middle East tensions, briefly spiking on the latest escalation before fading later in the day.

West Texas Intermediate futures briefly broke $75 a barrel after U.S. and British airstrike on Houthi militants in Yemen, put pulled back later in the session to settle $72.68. Brent futures broke $80 a barrel before settling at $78.29.

Several tanker companies on Friday halted traffic toward the Red Sea after the airstrikes. But traders still do not seem convinced that a broader Middle East conflict could erupt and disrupt crude supplies. Analysts say the Strait of Hormuz is the real potential flashpoint that could send prices higher.

"The market is going to wait to see whether we see this spread to a significant waterway for oil like the Strait of Hormuz," Helima Croft with RBC Capital Markets told CNBC on Friday.

— Spencer Kimball

The producer price index was dipped 0.1% in December, a sign that inflation may be easing. Economists polled by Dow Jones expected a gain of 0.1%.

— Fred Imbert

Shares of Citigroup were fractionally higher on Friday after CEO Jane Fraser announced a new wave of job cuts to boost the bank's stock price and earnings results.

Citigroup said that 20,000 employees, or around 10% of its workforce, would be let go in the "medium term" as part of a new corporate overhaul. Shares had earlier gained nearly 2% on the back of the news.

The layoff announcement was made after the bank posted a $1.8 billion loss in its fourth-quarter, which was tied to various risks and expenses. The company's fourth-quarter revenue came in at $17.44 billion, lower than the $18.75 billion expected by analysts polled by LSEG.

— Lisa Kailai Han

JPMorgan Chase shares were up more than 2% in the premarket even after the bank reported a fourth-quarter profit decline due to a $2.9 billion fee related to last year's regional bank failures.

Specifically, the bank said earnings dropped 15% to 9.31 billion on a year-over-year basis.

— Fred Imbert, Hugh Son