Asia Markets Trading Mixed as Investors Digest Key China's April Activity Data

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

Asia-Pacific markets are trading mixed as investors digest key economic releases from China that missed estimates despite market expectations of a further rebound growth.

Retail sales jumped 18.4%, industrial production rose 5.6% and fixed asset investment gained 5.2% – all below forecasts by economists surveyed by Reuters.

Mainland China markets fell, with the Shanghai Composite 0.6% lower and ending the day at 3,290.98, while the Shenzhen Component slid 0.71% to close at 11,099.26. Hong Kong's Hang Seng index climbed 0.82%.

Japanese stocks rose, with the Nikkei 225 up 0.73% and closing at 29,842.99. The Topix was 0.58% higher and ended at 2127.18.

Semiconductor-related stocks led gains in the Topix, with Tokyo Electron Device jumping by more than 3% and Advantest Corp rising more than 4%.

South Korea's Kospi advanced 0.04% and closed at 2,480.24, and the Kosdaq also saw gains, climbing 0.27% to finish at 816.75 while Australia's S&P/ASX 200 slipped 0.45% to end at 7,234.7.

Overnight in the U.S., all three major indexes rose as investors looked ahead to negotiations on the U.S. debt ceiling this Friday.

The S&P 500 added 0.3%, while the Dow Jones Industrial Average snapped a five-day losing streak and advanced 0.14%, to 33,348.60. The tech-heavy Nasdaq Composite led gains in the U.S., rising 0.66%.

— CNBC's Sarah Min contributed to this report

'In the next two years, Microsoft could easily be a $400 stock': analyst on Activision Blizzard acquisition

Microsoft's acquisition of Activision Blizzard is going to help the tech giant diversify away from its legacy businesses such as Office and Windows, said Jake Dollarhide, co-founder and CEO of Longbow Asset Management.

"Microsoft had $16.2 billion in revenues for gaming and Activision Blizzard has $8.7 billion last year. So this comes up to about $24.9 billion, increasing from 8% to 12% of Microsoft's revenues. They really want to try to drive content on their [Microsoft] Game Pass, on the cloud. They want to be the Netflix of video games," said Dollarhide on CNBC's "Capital Connection" Tuesday.

European Union regulators on Monday approved Microsoft's proposed $69 billion acquisition of gaming firm Activision Blizzard, following a months-long probe as regulators were worried that Microsoft may foreclose access to Activision's console and PC video games, especially globally successful games like Call of Duty.

"This is going to be good for Microsoft as a whole. It's going to allow them to to keep diversifying away from the legacy businesses," said Dollarhide.

"Within the next two years, this could easily be a $400 stock especially with a resurgence in the stock market and a new bull market for me," he said. Microsoft's shares were up 0.16% on Monday.

— Sheila Chiang

Goldman Sachs expects the Fed to start cutting rates in early 2024

Goldman Sachs' head of international strategic advisory solutions James Ashley thinks that the markets pricing in rate cuts from the Federal Reserve by end-year have "got it wrong."

Atlanta Federal Reserve President Raphael Bostic also said Monday that he doesn't foresee rate cuts at least through 2023, even if there's a recession.

Bostic is of the view that rate cuts will only happen "well into 2024."

Ashley told CNBC's "Street Signs Asia' that markets are pricing in around 80 basis points of rate cuts by the end of 2023 and a total of 300 basis points in 2024 – which he called, "really aggressive."

Ashley thinks that to see such levels of cuts, "you have to see some kind of deep recession, the kind that I don't see many people anticipating at this point in time," adding that the U.S. economy's recession, if there is one, will likely to be "relatively short" and shallow.

Goldman Sachs expects the Fed to turn to a dovish pivot in its monetary policy in early 2024.

— Lim Hui Jie

Global currencies see weakness following disappointing China data

Global currencies broadly weakened against the U.S. dollar as investors further digested China's economic data that widely missed expectations.

The Chinese onshore and offshore yuan both traded at weaker levels to stand at 6.9586 and 6.9662 against the U.S. dollar, respectively.

The Australian dollar weakened 0.16% to 0.6688 against the greenback while the New Zealand dollar pared most of its earlier gains and last traded marginally higher at 0.6247 against the U.S. dollar.

The Canadian dollar also weakened to 1.3479 against the greenback, while the Euro fell to a low of 1.8066 against the U.S. dollar shortly after the data release.

– Jihye Lee

Australia's central bank still sees that more rate hikes 'may still be required'

Minutes from the Reserve Bank of Australia showed that the central bank still sees rate hikes "may still be required," depending on how the economy and inflation in Australia evolve.

The RBA unexpectedly raised rates by 25 basis points in its last meeting on May 2 to 3.85%, defying market expectations.

The minutes reveal that the RBA's board members were considering between the 25 basis points hike and holding rates, but eventually decided on the rate hike.

This was because April data showed "the labor market remained tight and that inflationary pressures were significant," the board said.

"If these risks materialized, they would further delay the return of inflation to target, with the prospect of a damaging shift in inflation expectations," the minutes said.

While acknowledging "significant uncertainties" surrounding the economic outlook and particularly for household consumption, the RBA's board reiterated its commitment to price stability and the importance of ensuring that inflation expectations remain anchored.

— Lim Hui Jie

China's economic data widely misses expectations, retail sales jump 18%

China's economic data for April widely missed expectations as the economy continued to show an uneven recovery path as it emerges from the impact of its stringent Covid restrictions.

Retail sales rose by 18.4% – falling below economists' forecast for a surge of 21%.

Industrial production for April was up 5.6% year-on-year, compared to the 10.9% expected by economists surveyed in a Reuters poll. The figure was up 3.9% in March following a muted start to the year.

Fixed asset investment rose by 4.7%, against expectations of 5.5%. Youth unemployment rate meanwhile hit a record high of 20.4%.

– Jihye Lee

Australia's consumer sentiment falls on rates, national budget

Australia's Westpac-Melbourne Institute consumer sentiment dropped 7.9% from 85.8 in April to 79 in May.

The fall reflects "deep pessimism" the Reserve Bank of Australia's surprise rate hike of 25 basis points after pausing the previous meeting – as well as a "mildly disappointing Budget," it said in a release.

"On the one hand, consumer sentiment is back near the historic lows we have only really seen on a sustained basis in the deep recession of the early 1990s," Westpac Group Chief Economist Bill Evans wrote.

He added the survey however still reflects "resilience" around labor market conditions as well as confidence in the property market."

The survey's central view is that the weakness in the economy, coupled with clear progress towards the Reserve Bank of Australia's inflation target will see the current interest rate of 3.85% be the peak, but the "risks remain evenly balanced," said Evans.

– Jihye Lee

Japanese bank shares mostly gain on full-year earnings, forecasts

Shares of Japanese financial stocks rose Tuesday morning after major banks forecast to hit record profits in the current financial year ended March 2024.

Mitsubishi UFJ Financial Group rose 2.6%, leading gains on the Topix as it forecasted a 16% jump in net profit to 1.3 trillion yen ($9.63 billion) for its current financial year, exceeding a previous record set in March 2021.

This comes even as the bank posted a 14.3% drop in full-year net profit to 1.12 trillion yen. This is the second straight year that MUFG's net profit exceeded the one trillion yen mark.

Mizuho Financial Group shares rose 1.14% as the bank recorded a 45.8% increase in revenue and a 4.7% increase in net profit.

In contrast, shares of Sumitomo Mitsui Financial Group slid 1.07%, even the company reported an increase in revenue of 49.4% year-on-year to hit 6.14 trillion Japanese yen, while net profit came in at 14% higher to reach 805.4 billion yen.

SMFG is forecasting a net profit of 820 billion yen for the current financial year.

— Lim Hui Jie

S&P Global says role of natural gas to be debated at G-7 Summit

Gas will be at the front and center of discussions at the Group of Seven summit meeting later this week, S&P Global's Vice Chairman Daniel Yergin told CNBC's "Squawk Box Asia."

Yergin's comments come as media reports say leaders of G-7 are expected to target Russian energy, trade in tighter sanctions when they meet in Japan later this week.

Russian President Vladimir Putin's attempt to "use gas as a weapon" to break up the Western coalition "failed," Yergin said.

"There's another side to the gas story that's going to be a big debate in the G-7, and that's the future role of natural gas," he said.

"What's happened now, fundamentally, is that Putin let his decisions have cut himself off from the most important trading partner that Russia has, Europe, and the fact that gas which is one of its foundations, that valve has been politically shut now currently, is a big development," he said.

— Jihye Lee

CNBC Pro: Fund manager picks A.I. stocks and names an opportunity 'we haven't seen yet'

Big tech isn't dead, according to portfolio manager Trent Masters, who identified his favorite stocks to play artificial intelligence and more.

"The inflection is real," he said of AI, and named stock picks to play it, including a first "port of call" for investors.

CNBC Pro subscribers can read more here.

— Weizhen Tan

CNBC Pro: Hedge fund says hard landing is 'most likely' and names global 3 stocks to play it

A U.S.-based hedge fund is predicting a hard landing scenario for stock markets despite a steady decline in inflation, with the S&P 500 falling into a bear market.

Along with the downbeat prediction, hedge fund manager David Neuhauser also identified three global stocks that he believes will perform well under this scenario.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Fed's Bostic doesn't see rate cuts coming this year

Atlanta Federal Reserve President Raphael Bostic cast doubt Tuesday on the likelihood of interest rate cuts this year, even if a recession should hit.

"Inflation is not going to come down very quickly. And in that regard, then, cutting rates doesn't really fit into that scenario," the central bank official told CNBC's Steve Liesman during a "Squawk Box" interview.

"So the markets, I think, have been pretty optimistic about how easily inflation will respond to our policy," he added. "Honestly, I hope I'm wrong and they're right, because that'll mean that the economy's in balance sooner than later. But it's not my baseline case at all."

If anything, Bostic said his bias would be to a rate increase this year should inflation not come down as quickly as the Fed would like.

—Jeff Cox

Yellen is 'hopeful' on debt ceiling deal

Treasury Secretary Janet Yellen said over the weekend negotiations were making progress on a debt ceiling deal.

"I'm hopeful. I think the negotiations are very active. I'm told they have found some areas of agreement," said Yellen in an interview with the Wall Street Journal on Saturday from Japan during a meeting of G-7 finance ministers.

President Joe Biden and House Speaker Kevin McCarthy are expected to meet early this week, CNBC has reported. The Treasury Department said the U.S. may not be able to meet its financial obligations as early as June 1.

—John Melloy

U.S. dollar hits all-time high against Turkish currency following announcement of runoff election

The dollar hit a record high against the Turkish lira on Monday, reaching 19.6853.

Meanwhile, the iShares Turkey ETF (TUR) was down nearly 6% in premarket trading. If that performance holds in the session, it would mark the worst day for the fund since it lost of 6.1% on Feb. 7.

The moves follow news that the country will have an unprecedented runoff election for its president on May 28. A runoff is required because no candidate got 50% of the vote in Sunday's election.

The dollar index, which measures the U.S. greenback against a basket of other currencies, was last down 0.2% at 102.49.

— Alex Harring, Gina Francolla

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