China stocks rebound off five-year lows as stimulus comes into effect; most Asia markets drop

China stocks closed higher on Monday, bouncing back from five-year lows seen earlier today as the central bank's stimulus measures went into effect.

The benchmark CSI 300 gained 0.65% to close at 3,200.42, reversing losses in a volatile trading session that saw the index — which measures the largest companies listed in Shanghai and Shenzhen — fall to new five-year lows at one point.

The People's Bank of China surprised markets with a larger than expected easing measure, announcing that the amount that banks must hold as reserves — also known as the reserve ratio requirements — will be cut by 50 basis points. The move took effect on Monday.

— Lim Hui Jie

Onshore China shares are set for a sixth-straight daily loss, hurt by a sell-off in small-cap stocks despite more official pledges over the weekend to stabilize the country's financial markets.

The benchmark CSI300, which includes the largest blue-chips trading in Shanghai and Shenzhen, fell as much as 2.1% before paring losses to trade down 0.8% in mid afternoon. It's holding at levels not seen since late January 2019.

The CSI1000 index of the small cap A-share counters was down more than 5% in mid afternoon trade after earlier dipping by as much as almost 9%.

However, the most liquid offshore China listings in Hong Kong diverged from its onshore peers. The H-share index was down by as much as 1.5% before reversing losses to trade up 0.9%

After onshore markets tumbled as much as 3% before paring losses Friday, the China Securities Regulatory Commission pledged on Sunday to protect the interests of investors, including cracking down on illegal activities such as malicious short selling, insider trading and fraud.

A cut in the cash reserves banks in the mainland have to maintain kicked in Monday, and will likely ease a cash crunch in the last week of trading before a week-long Lunar New Year holiday.

— Clement Tan

The U.S. Federal Reserve is in no need to be in a "rush" to cut interest rates, according to JPMorgan Asset Management as more economic data pointed to a robust U.S. economy.

Federal Reserve Chair Jerome Powell poured cold water over market expectations for faster interest rates cuts and said in an interview aired Sunday that the central bank will proceed carefully with its tightening cycle and likely will move at a considerably slower pace.

"Why risk potentially causing inflation to reaccelerate? I think that's what he (Powell) was thinking and our base case is that probably come June, they'll start to think about cutting rates," Jonathan Liang, Asia ex-Japan head of fixed income investment specialists at JPMorgan Asset Management told CNBC's "Squawk Box Asia."

Liang said he expects four rate cuts by the Fed of 25 basis points each starting in June, but warned that if what Powell said causes any tightening in financial conditions then the U.S. economy may not be as strong while entering the second half of this year.

"And then maybe they may have to cut a little bit more," Liang said.

Data on Friday showed U.S. nonfarm payrolls expanded by 353,000 in January, nearly double of the Dow Jones estimate for 185,000 additions. Jobless rate for the months held at 3.7%, against the estimate for 3.8%.

— Shreyashi Sanyal

Shares of Mitsui Fudosan jumped as much as 11.8% in afternoon trading to hit a record 4,100 yen.

The Financial Times reported that U.S. activist investment firm Elliott Management had called upon Japan's largest property group to launch a 1 trillion yen ($6.74 billion) buyback plan.

The report said Elliott had also demanded the company sell down its $3.6 billion stake in Oriental Land, which runs Tokyo Disneyland, citing people familiar with both Elliott and Mitsui.  

Shares of Oriental Land fell 3.2%. Mitsui currently owns a 5.4% stake in Oriental Land, according to LSEG data, making it Oriental's second largest stakeholder.

The broader Topix was up 0.7%, while the Nikkei 225 added 0.6%.

— Shreyashi Sanyal

Thailand's headline inflation for January fell 1.11% year-on-year, steeper than a 0.82% decline estimated by economists polled by Reuters.

The figure also compares to a 0.83% drop in the previous month.

Thailand's core inflation inched up 0.52% year-on-year, compared to Reuters' forecast of a 0.57% increase.

—Lee Ying Shan

Shares of India's Paytm fell 10% Monday, extending a selloff following a regulatory crackdown which prevented the digital payment provider from undertaking any new deposits.

The 10% slump has become the maximum daily trading limit for India's stock exchanges, applicable Monday onwards.

The stock last traded at 438.5 rupees, just shy of an all-time low of 438.35 rupees in November 2022.

—Lee Ying Shan

China's services sector activity expanded for a 13th straight month in January, according to a private survey by Caixin, but the growth was slightly lower compared with December.

The services purchasing managers' index came in at 52.7, compared with 52.9 in the preceding month.

Caixin pointed to "a notable softening in the rate of new order growth" for the sector, although it also said that employment increased slightly for a second straight month, and companies were generally upbeat about the 12-month services activity outlook.

— Lim Hui Jie

Separate private surveys showed the slowdown in Australia's business activity eased, while Japan's services activity continued to expand in January.

The Judo Bank Australia services PMI rose to 49.1 in January, up from 47.1 in December. "A stabilisation in demand, supported by a shallower fall in export business, led to services activity declining at only a marginal rate in January," according to the survey.

A PMI reading of above 50 indicates expansion in the sector, while a reading below 50 signifies contraction.

The au Jibun Bank Japan services business activity index rose to 53.1 in January from 51.5 in December, remaining in expansionary territory.

The survey said the rate of growth was the highest since September as new business inflows rose, while international demand increased for the first time in five months.

— Shreyashi Sanyal

Business activity in Hong Kong contracted marginally in January, following two straight months of expansion.

Hong Kong's PMI came in at 49.9, down from the 51.3 recorded in December, according to S&P Global.

S&P Global wrote that this was due to new business demand declining in January, though output continued to expand as firms worked through their existing orders.

A PMI reading of above 50 indicates expansion in the sector, while a reading below 50 signifies contraction.

— Lim Hui Jie

Citi has updated its list of its top "high-conviction" stock picks from global markets including the United States, Europe and Asia-Pacific.

Those are the "high conviction, differentiated stock recommendations to generate alpha" that its analysts have selected.

"We identify catalysts that will trigger outperformance and chose liquid names in which investors can build positions," Citi said in its Feb. 1 report.

Here are four of the names.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Ongoing political tensions, still-high inflation levels and uncertainty over when the U.S. Federal Reserve will cut interest rates have raised questions about which sectors — and stocks — will outperform looking ahead.

For Kevin Teng, CEO of Wrise Wealth Management Singapore, which serves ultra-high-net-worth individuals across Asia, the Middle East and Europe, three top stocks stand out as good plays right now.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

Meta shares popped more than 21% Friday, pulling the communication services sector up 4.5% to lead the S&P 500's gains.

Consumer discretionary was the next biggest winner, rising 2.5%. Amazon and Etsy shares were the top advancers, rising nearly 8% and 5%, respectively.

Meanwhile, real estate fell 1.6%, making it the worst-performing sector of the day.

Week to date, consumer discretionary is the biggest advancer, jumping 3.9%.

— Hakyung Kim

Stocks closed higher on Friday, with the S&P 500 reaching a fresh record high.

The broad market index added 1.1% to close at 4,958.61, while the Dow Jones Industrial Average added 134.58 points, or 0.4%, to 38,654.42. The Nasdaq Composite gained 1.74% to finish the session at 15,628.95.

— Brian Evans

The two-month gain in consumer sentiment (17.7 points) in December and January just reported by the University of Michigan was the most since the two months ended in March 1991 (20.9 points), which came at the end of the Gulf War, where coalition forces defeated Iraq and restored Kuwaiti independence.

Consumer sentiment came in at 79 in January, the highest since July 2021 when sentiment ended at 81.2. Inflation expectations for the coming year were 2.9% in the latest survey, the lowest since Dec. 2020's reading of 2.5%.

The monthly Index of Consumer Sentiment is published in the Surveys of Consumers conducted by the Survey Research Center at the University of Michigan.

— Scott Schnipper, Gina Francolla

The U.S. economy added 353,000 jobs in January, easily beating economist expectations. Economists polled by Dow Jones expected a print of 185,000.

The report also included inflationary data in the form of greater-than-expected wage growth. Wages expanded by 4.5% year over year, more than a 4.1% forecast.

This comes after Fed Chair Jerome Powell signaled this week that a March rate cut was unlikely.

— Fred Imbert