China Markets Higher on Consumer, Healthcare Gains; Asia-Pacific Mostly Up After U.S. Sell-Off

Toru Hanai | Bloomberg via Getty Images

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

Mainland China markets popped on Tuesday afternoon while shares in the Asia-Pacific were mostly higher after seeing sharp falls on Monday.

The Shanghai Composite in mainland China rose 1.40% to 3,093.86 and the Shenzhen Component was 1.939% higher at 11,175.12. Data from Refinitiv Eikon showed healthcare, education and consumer non-cyclical stocks were rising.

Liquor-maker Kweichow Moutai added 1.34%, while Wuliangye, another manufacturer, jumped 5.38%.

The CSI 300 index, which tracks the largest mainland-listed stocks, was 1.45% higher at 3,892.30.

The Nikkei 225 in Japan rose 0.53% to 26,571.87, and the Topix index gained 0.47% to 1,873.01. In Australia, the S&P/ASX 200 added 0.41% to 6,496.20.

South Korea's Kospi struggled for direction and closed 0.13% higher at 2,223.86, while the Kosdaq added 0.83% to 698.11. In Hong Kong, the Hang Seng index was flat in the final hour of trade.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.41%. China's industrial profits for January to August fell 2.1% from the same period a year ago, official data showed.

Overnight in the U.S., major stock indexes dropped. The S&P 500 slipped 1.03% to 3,655.04, a new closing low for 2022. The Dow Jones Industrial Average fell into a bear market after it lost 329.60 points, or 1.11%, to 29,260.81. The Nasdaq Composite shed 0.6% to 10,802.92.

"The sell-off in bonds and equities continued as sterling's weakness highlighted the fragility of markets to policy uncertainty," ANZ Research analysts wrote in a Tuesday note, a day after the pound hit a record low.

— CNBC's Sarah Min and Tanaya Macheel contributed to this report.

Bank analysts say they are bullish on the Singapore dollar

Singapore's strong economic fundamentals and its central bank's efforts to fight inflation have made the Singapore dollar something of a "safe haven" in the region, analysts told CNBC.

The Singapore dollar has fallen more than 6% against the buoyant U.S. dollar since the start of the year, but other currencies in Asia have weakened even more.

The Southeast Asian country's high foreign currency reserves, a strong current account surplus and a well managed currency policy as some reasons for the Singapore dollar's resilience, said Max Lin, Asia FX and rates strategist at Credit Suisse.

Charmaine Jacob

The ‘real cure’ for inflation has gone ignored, Steve Forbes says

Central banks and governments have overlooked the importance of maintaining stable currencies while focusing on raising interest rates to cool inflation, said Steve Forbes, chair of Forbes Media.

"No central banker today — hardly any — talks about stable currencies. It's about depressing the economy to fight inflation," he said at the Forbes Global CEO Conference in Singapore.

Currencies are weakening against the U.S. dollar as interest rates in the United States continue to rise.

The British pound briefly fell 4% to an all-time low of $1.0382 on Monday. Both the Chinese yuan and Japanese yen also fell heavily on Monday as the two economies maintain more accommodative monetary policies than the U.S.  

Read the full story here.

— Su-Lin Tan

The Fed is 'very fortunate' to be raising rates while unemployment levels are low, former governor says

The U.S. Federal Reserve is "very fortunate" that current unemployment levels are below 4%, Randy Kroszner, professor of economics at University of Chicago Booth School of Business told CNBC's "Squawk Box Asia."

"When the unemployment is still relatively low, they're not getting the same kind of pressure" to slow down the pace of its rate hikes, the former Fed governor said.

"It's rare that a central bank can raise interest rates as much as they have," he said. "In addition to maintaining credibility, it's really important for the Fed to be moving fast."

–Jihye Lee

Asian stock markets could outperform in 2023, led by China, portfolio manager says

China is likely to loosen its zero-Covid policy in 2023 and economic activity will recover, which bodes well for the stock market, according to Jun Bei Liu, portfolio manager at Tribeca Investment Partners.

Authorities have provided "so much stimulus," which will help domestic activity, she said.

Meanwhile, risks of recession remains very high for developed markets in the West, Liu said, adding entrenched inflationary pressures will hurt consumption and economic activity.

"With that sort of environment, when corporate earnings [are] going backwards — very hard to see equity markets do substantially better," she said.

— Abigail Ng

World Bank slashes growth forecasts for East Asia and Pacific region

The World Bank has slashed its 2022 full-year growth forecast for the East Asia and Pacific region to 3.2% from its April prediction of 5%, it said in its latest report released Tuesday.

"The slowing growth is mostly due to China," it said, adding the organization also cut its 2022 forecasts for the nation to 2.8% from 5%. The World Bank expects China to grow 4.5% in 2023.

The report said the median headline inflation is seen to surpass 5% this year, an upward revision from 3% previously forecasted in April.

–Jihye Lee

CNBC Pro: Here's where Dan Niles is putting his money

"We made money today. We are up in August. We're up for the year," fund manager Dan Niles told CNBC.

As major stock markets remain deep in the red this year, the investment veteran shares what he's buying in this volatile market.

Pro subscribers can read more.

— Zavier Ong

Fed's Mester says it is better to act 'aggressively' against high inflation

U.S. inflation is "unacceptably high" and uncertainties make monetary policy decisions "not trivial," said Cleveland Fed President Loretta Mester in prepared remarks at the Massachusetts Institute of Technology.

"When there is uncertainty, it can be better for policymakers to act more aggressively," she said. "Aggressive and pre-emptive action can prevent the worst-case outcomes from actually coming about."

She said she will be "very cautious" when assessing inflation data.

"I will need to see several months of declines in the month-over-month readings," she said. "Wishful thinking cannot be a substitute for compelling evidence."

–Jihye Lee

CNBC Pro: Analysts like Nvidia once again, with Citi giving it almost 100% upside

Analysts are once again starting to get bullish on Nvidia, after the semiconductor giant lost favor amid geopolitical tensions and a slowdown in the chip sector.

Citi and JPMorgan both said last week that solid demand in PC gaming, as well as cloud adoption in data centers, were set to be tailwinds for Nvidia.

So how much upside did they each give Nvidia shares? CNBC Pro subscribers can read more here.

— Weizhen Tan

Oil, U.S. dollar diverge

For the first half of 2022, the price of oil and the U.S. dollar both rose sharply. However, that has changed in recent weeks, with notable moves for both on Monday.

The Dollar Index rose as high as 114.527 on Monday, hitting its highest level since 2002.

Meanwhile, futures for West Texas Intermediate crude fell 2.58% to $76.08 per barrel. That is the U.S. benchmark's lowest settle since Jan. 3, meaning nearly all of oil's year to day gains have been erased.

— Jesse Pound, Christopher Hayes

Treasury yields rising at rapid clip

Treasury yields are rising at a rapid clip, as global rates jump and investors anticipate a more aggressive Federal Reserve.

The benchmark U.S. 10-year yield rose above 3.9% for the first time since 2010. It was at about 3.75% on Friday. The 2-year yield Monday rose by about 13 basis points to 4.33%. A basis point equals 0.01 of a percentage point.

The U.K. 10-year gilt yield was at 4.24%. It was at 3.15% just a week ago.

Bond yields move opposite price. A sharp sell-off in U.K. bonds led the selling, as investors weigh the Bank of England's potential response to a U.K. government plan to cut taxes and raise spending. The pound fell to an all-time low against the dollar, as U.K. rates jumped Monday.

The Fed sent shockwaves across global rates markets Wednesday with a more aggressive forecast for interest rate hikes. "I think there's three things" moving the market, said AmeriVet's Greg Faranello. "It's the repricing of the Fed. It's the global rates story, and it's a function of liquidity," he said.

Andy Brenner of National Alliance said he sees no signs of support in the chart of the 10-year yield until 4%.

"This could also be the bond vigilantes seeing nothing to stop them," said Brenner.

--Patti Domm

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