Asia-Pacific markets mostly fall as investors digest Chinese economic data

China’s “exit wave” during its reopening process has dragged down the economy significantly, Goldman Sachs economists said in a report.

“The ongoing ‘exit wave’ on the back of China’s faster-than-expected reopening has taken a heavy toll on economic activity in recent months, due to surging infections, a temporary labor shortage and supply chain disruptions,” it said in a report.

“It is very surprising in our view that the reported numbers for December were not worse,” the economists said.

– Jihye Lee

As India sees a rise in income levels and improvements in infrastructure, there is large growth potential for India’s four wheel passenger vehicle sector, according to Kotak Mahindra Life Insurance.

“Affordability is improving and roads are also improving … We see good demand for [India’s] auto sector, said Hemant Kanawala, head of equities at the firm, adding that growth rate of two wheel vehicles may remain low.

Anish Shah, chief executive officer of India’s Mahindra Group, the parent company of Mahindra and Mahindra, said he expects the firm’s automotive sector to see strong growth this year.

The company’s automotive leg is “going great guns” and demand for vehicles has been “phenomenal,” Shah told CNBC on the sidelines of the World Economic Forum.

“We are in the process of doubling our capacity for auto, even in the face of a potential recession,” Shah said. “With the level of demand, it’s something that we need to do at this point.”

Shares of Mahindra and Mahindra traded slightly lower compared to the start of the trading day by 0.02%.

— Charmaine Jacob

Iron ore prices are forecast to be around $130 to $140 as traders keep China’s reopening in focus, said Credit Suisse’s Head of Energy and Resources Research, Saul Kavonic.

“We are expecting that $130 to $140 mark to be where prices kind of end up and top out this year,” he said.

While the last few weeks of iron ore demand strength is buoyed by speculative buying and holiday period purchases, he said the markets are currently watching how China’s reopening plays out and the rolling out of any infrastructure stimulus.

He said these measures will “sustain that demand for iron ore throughout the course of this year well into next year.”

Australia’s mining giant Rio Tinto posted their fourth quarter production results which slightly beat estimates.

“The real focus [of] Rio has been on iron ore, which is supportive the whole sector over the last few months which has been a call that’s finally come good at the end of last year and early this year,” he said.

Rio Tinto‘s shares last traded down 1.11%.

—Lee Ying Shan

China’s December retail sales beat estimates, falling only 1.8% on an annualized basis, significantly better than the decline of 8.6% projected in a Reuters poll.

Industrial output also grew 1.3% in December, higher than expectations for an increase of 0.2%.

In the fourth quarter, China’s economy expanded by 2.9% on an annualized basis, better than the expected 1.8% growth. While quarterly growth was flat, it still beat expectations for a 0.8% contraction.

Despite better-than-expected data, the Chinese offshore yuan weakened sharply from 6.7403 to 6.7563 against the U.S. dollar shortly after the release.

Shares of Alibaba rose after the Wall Street Journal reported that Ryan Cohen built a stake in the company “worth hundreds of millions of dollars.”

Cohen, who founded online pet retailer Chewy and is also chairman of GameStop, is privately pushing Alibaba to accelerate and further boost its share-repurchase program, the Journal report said.

Hong Kong-listed shares of Alibaba rose 2% in the first hour of trade. The stock has since pared its gains to trade roughly flat.

– Jihye Lee

U.S. Treasury Secretary Janet Yellen is scheduled to hold a meeting with Chinese Vice Premier Liu He on the sidelines of the World Economic Forum, China’s commerce ministry said in a statement.

The two will hold a meeting to “strengthen macroeconomic and financial policy coordination,” the ministry said.

The meeting will take place in Zurich on Jan. 18, according to the statement, adding that the two will discuss the implementation of the agreements reached between U.S. President Joe Biden and Chinese President Xi Jinping late last year in Bali, Indonesia.

The sit-down will mark the first face-to-face meeting between Yellen and Liu.

Separately, Politico reported U.S. Secretary of State Antony Blinken will meet newly appointed Chinese foreign minister Qin Gang in Beijing on Feb. 5-6, citing Washington-based diplomats familiar with the matter.

– Jihye Lee

Singapore’s non-oil domestic exports fell 20.6% in December on an annualized basis, a further drop from a decline of 14.7% seen in November.

The steep decline was driven mainly by exports to China, Indonesia and Hong Kong, according to the government release. Exports to South Korea and Japan rose, it said.

The nation’s total trade declined 7.7% in the month of December compared with a year ago – with exports dropping 7.1% and imports also dropping 8.2%.

– Jihye Lee

Shares of an under-the-radar carbon capture company are expected to rise by 65% due to increasing global demand for emissions reduction technology, according to investment banks analyzing the stock.

The company’s latest innovation, revealed last week, could cut the energy needed to capture carbon and improve the company’s profitability in the future, according to analysts at a German investment bank.

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— Ganesh Rao

With the first two weeks of 2023 trading done, the three major indexes are up so far for the year.

The Nasdaq Composite is leading the way, adding 5.9% as investors bought beaten-down technology stocks on rising hopes of an improving landscape for growth holdings. The S&P 500 and Dow followed, gaining 4.2% and 3.5%, respectively.

— Alex Harring

Stock futures were lower despite the market coming off a winning week.

Futures tied to the Dow dipped 0.1%. S&P 500 and Nasdaq-100 futures fell 0.2% and 0.4%, respectively.

— Alex Harring