Asia markets, banks, Europe, U.S., rescue plans

The Hang Seng index led gains in the Asia-Pacific region on Friday, driven in part by the surge in tech stocks.

Baidu was up almost 12% after its U.S.-listed shares surged overnight, following the launch of its Chinese-language ChatGPT alternative – named Ernie bot.

Shares of streaming platform company Bilibili also jumped nearly 8% in early trading.

The HSI itself was up 1.21%, while the tech heavy Hang Seng Tech index was 3.13% higher.

— Lim Hui Jie

Indonesia’s central bank has maintained its 7 day reverse repurchase rate at 5.75% and its lending rate at 6.5%.

In a release, the bank explained that the decision is “consistent” with its monetary policy stance to ensure lower inflation expectations and inflation. 

The central bank has a target to return core inflation rate to a ±1% range from 3% in the first half of 2023, and headline inflation to the same range in the second half of the year.

The Indonesian rupiah traded flat against the U.S. dollar at 15,375 on Friday, after the announcement.

— Lim Hui Jie

The Japan Center for Economic Research said that the consensus forecast for the economy’s wage growth in 2023 was raised to 3.05% in March from an expected rise of 2.85% seen in January.

This would mark the strongest growth seen in Japan since 1994, Nikkei reported.

In the research survey, most of the respondents revised their estimates upwards on overall wages and base pay component, the release showed.

Japan’s shunto wage negotiations concluded Wednesday, Reuters reported – marking the biggest pay rises not seen in decades as inflation levels rise.

– Jihye Lee

Chinese tech company Baidu revealed Thursday its ChatGPT rival, called Ernie bot in English.

Shares closed 3.8% higher in the U.S., in contrast to a steep drop of nearly 6.4% in Hong Kong trading on Thursday.

Baidu’s Ernie bot primarily operates in Chinese, although the chatbot can also understand English. The company’s business partners received priority in initial access to Ernie bot.

Home prices in China rose 0.3% in February compared to January, but fell 1.2% compared to a year ago, according to Refinitiv data of 70 cities from the National Bureau of Statistics.

Month-on-month, home prices rose at the fastest pace since July 2021, as investors look ahead to more accommodative policies from the government. In January, prices rose 0.1% on a monthly basis.

Data of 55 cities reported rises in new home prices in February compared to 36 cities reporting a rise in January.

– Jihye Lee

Singapore’s non-oil domestic exports fell 15.6% in February compared to a year ago – less than expectations to see a drop of 16%. In January, the reading fell 25% on an annualized basis.

Compared to a month ago, non-oil domestic exports fell 8%, further than expectations to see a decline of 0.5%. The monthly reading slightly rose in the previous month by 0.9%.

Non-oil domestic exports for Singapore’s top 10 markets as a whole declined in February 2023, based on government data – particularly to the European Union, Hong Kong and Taiwan, while exports to the U.S., Japan and Thailand rose.

– Jihye Lee

Tesla has long been an investor favorite for exposure to the electric vehicle transition, but not everyone is convinced. Berkshire Hathaway-backed BYD, for example, is often touted as a better bet than Tesla.

Ray Wang of Constellation Research believes Tesla versus BYD is “really going to be a story for the ages.”

Pro subscribers can find out which stock is his favorite here.

— Zavier Ong

South Korea said Japan has agreed to lift export restrictions on three semiconductor materials to Seoul, the Ministry of Trade, Industry and Energy said in a statement.

Seoul also said it will drop its dispute against Tokyo with the World Trade Organization once the lift takes place, the ministry said.

Japan in 2019 removed South Korea from its “white list” of favored trade partners, after South Korea’s court rulings ordered Japanese firms to compensate for wartime forced laborers.

– Jihye Lee

The European Central Bank followed through with the 50 basis point rate hike it flagged at its prior meeting, despite ongoing volatility in the banking sector.

Markets had pared back bets on the rise after severe sell-offs in European bank stocks over the last week.

It takes the bank’s main rate to 3%.

Euro zone headline inflation is running at 8.5%, well above the central bank’s target of 2%.

“The elevated level of uncertainty reinforces the importance of a data-dependent approach to the Governing Council’s policy rate decisions, which will be determined by its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission,” the ECB said in its decision.

Read more here.

— Jenni Reid

The potential deposit at First Republic being discussed by major U.S. banks has grown to $30 billion, CNBC’s David Faber reports.

The biggest contributions would come from Bank of America, Wells Fargo, Citigroup and JPMorgan Chase at about $5 billion apiece. Morgan Stanley and Goldman Sachs will deposit around $2.5 billion each, the sources said. Truist, PNC, U.S. Bancorp, State Street and Bank of New York will deposit about $1 billion each.

— Jesse Pound

Big Tech shares climbed higher Thursday, shrugging off fears of the spreading banking crisis. Amazon shares rallied 3.3%, while Google parent Alphabet jumped 3%. Apple, Meta and Netflix also traded higher.

The strength in technology heavyweights pushed the major stock averages in the green in morning trading. Investors could be flocking to Big Tech to embrace their megacap safety, while betting that the current turmoil will keep the Fed from raising rates, benefitting growth names.

— Yun Li

Banking industry tumult is placing the U.S. economy in greater danger of a recession, according to Goldman Sachs.

The Wall Street firm upped its probability of a contraction in the 12 months ahead to 35%, a 10 percentage point increase, “reflecting increased near-term uncertainty around the economic effects of small bank stress,” Goldman economist Manuel Abecasis said in a client note Wednesday evening.

Regional bank stocks were taking a beating against Thursday. The SPDR S&P Regional Banking ETF slumped 3.7% in early trading.

—Jeff Cox

Sources told CNBC’s David Faber that a group of financial institutions — including Goldman Sachs, Citigroup and JPMorgan Chase — is in talks to deposit about $20 billion in First Republic.

The news comes after First Republic‘s stock has been pummeled in recent days, sparked by the collapse of Silicon Valley Bank last Friday and Signature Bank over the weekend. 

Shares of First Republic were down more than 30% earlier in the day. In early afternoon trading, however, the stock was only down 3.3% before being halted for volatility.

— Jesse Pound, Fred Imbert