Commercial and residential buildings at dusk in the Minato district of Tokyo, Japan.
Bloomberg | Bloomberg | Getty Images
Asia-Pacific markets mostly declined Friday as electric vehicle stocks in the region dropped for a second day, while investors also digested inflation data from Tokyo.
Hong Kong-listed shares of Xpeng and Li Auto fell over 4% each, while BYD fell 4.2%. The broader Hang Seng Index dropped 1.8%, while the Hang Seng Tech index, housing most EVs, shed 4%.
Tesla shares fell 12% in U.S. trading on Thursday after the EV giant missed earnings expectations and warned of a slowdown in 2024, which also triggered a sell-off in Asian EV companies.
China's CSI 300 dropped 0.27% and closed at 3,333.82, retreating from a 2% bounce in the previous session after property stocks got a boost from Beijing's plans to boost liquidity in the beleaguered sector.
They extended gains on Friday, with the CSI 300 real estate sector hitting a near four-week high after rising 3% in afternoon trading.
Hong Kong stocks were set to rise the most among their Asia peers for the week, with the Hang Seng up 4.2% for the week.
Japan's Nikkei 225 closed 1.34% lower, falling below 36,000 and ending at 35,751.07 after the January inflation reading from Tokyo came in softer compared to December. Tokyo's data is widely considered to be a leading indicator for nationwide inflation. The broad based Topix fell 1.35% to 2,497.65.
Tokyo's headline and core inflation rate for January both came in at 1.6%, compared with 2.4% and 2.1%, respectively, in December.
South Korea's Kospi ended 0.3% up at 2,478.56, while the small-cap Kosdaq rose 1.64% at 837.24.
Overnight in the U.S., all three major indexes gained, with the S&P500 index advancing 0.53% to reach a record high of 4,894.16, notching a six-day winning streak.
The Dow Jones Industrial Average added 0.64%, while, the Nasdaq Composite rose 0.18%, weighed down by a post-earnings tumble in Tesla shares.
— CNBC's Alex Harring and Brian Evans contributed to this report.
Correction: This story has been updated to reflect that Australia markets are closed for a public holiday on Friday.
China property stocks rally for second day, hit near four-week highs
China property investment slid nearly 8% in the first half of the year, official data showed Monday, pointing to a deepening decline in investment for a sector that accounts for about a quarter of the world's second-largest economy.
Future Publishing | Future Publishing | Getty Images
China's property stocks extended gains on Friday, with the CSI 300 real estate sector hitting a near four-week high.
The index was last up 2.5% in morning trading, after rising nearly 6% on Thursday. It has gained nearly 12% in the last four sessions.
China's real estate stocks jumped in the previous session after the People's Bank of China along with the Ministry of Finance announced measures that would help boost the liquidity available to property developers.
The new measures will be valid until the end of 2024.
Shares of Hong Kong-listedCountry Gardenrose 1.4%,Logan Groupgained 1.6% andCK Asset Holdings added 1.5%. Hong Kong's Hang Seng Mainland Properties index rose 0.3% after climbing 4.3% in the last session.
— Shreyashi Sanyal
Japan December services producer prices rise 2.4% — fastest growth since March 2015
Japan's services producer price index rose 2.4% year on year in December, the same as the revised 2.4% reading for November which was also released Friday.
This means that Japan's service prices have hit their fastest rate of growth since March 2015.
Over the whole of 2023, the services PPI rose 2% year on year, faster the prior year's 1.8% and 2021's 0.9%.
— Lim Hui Jie
Bank of Japan in no hurry to change monetary policy stance, meeting minutes show
Japan's central bank will not terminate its negative interest rate and yield curve control policy based on "specific numerical values" including negotiations around wage increases.
According to minutes of the BOJ's December meeting, several board members said exiting from the NIRP and YCC will be "decided at each future meeting based on various data and information obtained at each point in time."
At the meeting, some members also expressed the view that the bank was currently not in a situation where it would "fall behind the curve" if it did not rush to raise policy interest rates.
The members added even if the BOJ made a decision once the labor-management wage negotiations conclude in spring 2024, "it would not be too late."
— Lim Hui Jie
CNBC Pro: Buy or avoid China? The pros share their take — and stock picks
Is it time to buy China, or should investors continue to avoid this market?
Quite a few developments surrounded the Asian giant this week. Chinese stocks dropped to an almost five-year low last week, reflecting persistent bearishness from the past year. But this week, China embarked on monetary easing as it pledged to reduce the amount of liquidity that its banks are required to hold as reserves. Its central bank also said Wednesday that there's room for further easing.
Investing pros share their views on when a turnaround in the Chinese market might happen, as well as the sectors and stocks they like.
CNBC Pro subscribers can read more here.
— Weizhen Tan
Tokyo inflation softens for third straight month; core inflation lower than expected
The inflation rate in Japan's capital city of Tokyo fell to 1.6% in January, down from 2.4% in December.
Tokyo's inflation rate is widely considered to be a leading indicator of nationwide inflation trends in Japan.
Tokyo's core inflation rate, which strips out prices of fresh food, also came in at 1.6%, lower than the 1.9% expected by economists polled by Reuters and also lower then December's 2.1%.
The so called "core-core" inflation rate, which strips out fresh food and energy prices and is watched by the Bank of Japan, fell to 2.2% in January from 2.7%.
— Lim Hui Jie
CNBC Pro: Goldman Sachs likes this under-the-radar European sector, naming 2 stocks with almost 40% upside
Europe's power grid is in dire need of an upgrade, Goldman Sachs says, naming stocks it expects to benefit from the network's expansion and modernization.
"We believe that stocks with a large exposure to power grids will benefit from a solid growth driver, for at least the coming ten years," they wrote. "Power grids sit in the sweet spot of electrification: besides an accelerating top line, we highlight attractive risk-adjusted returns, which are usually set on a 'cost plus' basis."
Goldman's analysts named two buy-rated stocks to play the theme.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
U.S. GDP grows at much faster-than-expected pace
The U.S. economy expanded by 3.3% in the fourth quarter, easily surpassing expectations. Economists polled by Dow Jones had forecast the economy grew by 2% in the fourth quarter.
The report also included encouraging data on the inflation front. The price index for personal consumption expenditures rose 2.7% on an annualized basis, down from 5.9% a year prior. Core PCE increased by 3.2%, down from 5.1%.
The report comes as investors look ahead to possible Federal Reserve rate cuts later this year.
— Fred Imbert
U.S. crude breaks above $76 on strong economic growth, China stimulus
Oil prices rallied on Thursday as demand expectations rose on strong U.S. economic growth and China stimulus, while supply tightened after winter storms hit crude production.
The West Texas Intermediate contract for March rose $1.22, or 1.62%, to trade at $76.31 a barrel. The Brent March contract gained $1.21, or 1.51%, to trade at $81.25 a barrel.
U.S. crude remaining above $76 a barrel would indicate a breakout that confirms oil's immediate trend has moved to the upside, according to Matt Maley, chief market strategist with Miller Tabak.
This would be also a good sign for energy stocks which have lagged crude prices since mid-December, Maley said. If crude oil confirms a change in trend, energy stocks will have to play catch up, he told CNBC.
— Spencer Kimball
Tesla in 2024 is approaching, and in some cases exceeding, solar stocks' losses
Tesla (-26.5%) has already lost more value in 2024 than Boeing (-23%), quite an impressive feat.
Now the EV maker is competing with washed out solar energy stocks to register some of the largest declines early in the new year.
For the time being, Sunnova Energy (-31.3% in 2024) and Sunrun (-27%) have declined more than Tesla so far this year. But Tesla now surpasses the declines in both SolarEdge Technologies (-25.3%) and Enphase Energy (-19.6%).
Tesla vs Sunnova shares so far in 2024.
— Scott Schnipper
As an expert in financial markets and global economic trends, I bring a wealth of knowledge and experience to analyze the intricate details of the provided article. My expertise is evident in my ability to interpret and connect various concepts within the financial landscape. Let's break down the key elements in the article:
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Asia-Pacific Markets and Electric Vehicle (EV) Stocks:
- The article highlights a decline in Asia-Pacific markets, with specific attention to the performance of electric vehicle stocks. Hong Kong-listed Xpeng, Li Auto, and BYD experienced drops, impacting both the broader Hang Seng Index and the Hang Seng Tech Index, which houses most EVs.
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Tesla's Influence on Asian EV Companies:
- Tesla's shares fell by 12% in U.S. trading, triggering a sell-off in Asian EV companies. Tesla's underwhelming earnings report and a warning of a slowdown in 2024 contributed to this trend.
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China's CSI 300 and Property Stocks:
- The CSI 300 in China dropped slightly but rebounded after Beijing's plans to boost liquidity in the property sector. China's property stocks, including Country Garden, Logan Group, and CK Asset Holdings, rallied due to measures announced by the People's Bank of China and the Ministry of Finance.
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Japan's Nikkei 225 and Inflation Data:
- Japan's Nikkei 225 closed lower, influenced by softer-than-expected inflation data from Tokyo. Tokyo's inflation rate for January was 1.6%, down from 2.4% in December, and is considered a leading indicator for nationwide inflation.
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South Korea's Kospi and Kosdaq:
- South Korea's Kospi ended slightly up, while the small-cap Kosdaq experienced a notable rise.
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U.S. Market Performance:
- In the U.S., all three major indexes (S&P500, Dow Jones Industrial Average, and Nasdaq Composite) gained, with the S&P500 reaching a record high.
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China's Property Investment Decline:
- The article mentions China's property investment decline of nearly 8% in the first half of the year, indicating challenges in the real estate sector.
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Japan's Services Producer Prices:
- Japan's services producer prices rose by 2.4% year-on-year in December, marking the fastest growth since March 2015.
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Bank of Japan's Monetary Policy Stance:
- The Bank of Japan (BOJ) indicated in its meeting minutes that it is not in a hurry to change its negative interest rate and yield curve control policy. The decision will be based on various data and information obtained at each meeting.
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Global Economic Overview:
- The article briefly touches on global economic indicators, such as U.S. GDP growing at a faster-than-expected pace in the fourth quarter of the previous year.
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Oil Prices and Economic Factors:
- Oil prices rallied on expectations of strong U.S. economic growth and China's stimulus. Winter storms affecting crude production also contributed to the tightening of oil supply.
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Tesla's Performance in 2024:
- The article notes Tesla's significant decline in value in 2024, comparing it to losses in other sectors, including solar energy stocks.
My comprehensive understanding of these concepts allows me to provide insights into the interplay of global financial markets, economic indicators, and specific industry trends.
