This is CNBC's live blog covering Asia-Pacific markets. Asia-Pacific markets traded lower as investors struggled to shake off recession fears. Stocks on Wall Street marked their second consecutive week of losses for the first time since September as concerns grew over the U.S.
Federal Reserve continuing to hike rates. In China, officials vowed to stabilize its economy in 2023 and maintain ample liquidity in financial markets in order to meet key targets, according to a statement following the annual budget-setting Central Economic Work Conference last week, Reuters reported. In mainland China.
The Shanghai Composite also fell 1.31% as the city announced it will shut most schools again Monday as the number of Covid cases surged. The Shenzhen Component fell 0.96% and Hong Kong's Hang Seng index fell 0.45%. The S&P/ASX 200 in Australia traded 0.2% lower.
In Japan, the Nikkei 225 fell 1.08% and the Topix lost 0.68%. South Korea's Kospi was down 0.5%. The People's Bank of China is slated to set rates for its one and five-year Loan Prime Rates (LPR) on Tuesday.
Oil futures rise on hopes over China demand recovery Oil futures rose in Asia's morning trade as optimism over China's reopening leading to a recovery in demand outweighed recession fears. Futures of Brent crude gained 1.16% to stand at $79.96 a barrel, while U.S. West Texas Intermediate futures rose 1.18% to trade at $75.17 per barrel. China recently issued plans to increase flights to accommodate a rebound in travel for the upcoming Lunar New Year holidays, Caixin reported last week.
The report said that officials have laid out plans to target almost 90% of pre-pandemic levels by the end of January. -- Jihye Lee Casino stocks in Hong Kong fall despite renewed licenses Hong Kong-listed Macao casino stocks fell in Asia's morning session despite winning 10-year concessions to operate their integrated resorts. A concession essentially is an operating agreement with the government, which in turn, licenses the operators.
Wynn Macau fell 8%, while MGM China lost about 12%. Sands China also fell 4% and Galaxy Entertainment lost 3%. The moves come as media reported a rising death toll observed in Beijing and as Shanghai ordered lockdowns for schools, dampening investors' sentiment on China's reopening path.
-- Jihye Lee, Contessa Brewer China to focus on stabilizing economy in 2023: Xinhua China will prioritize stabilizing its economy and ramping up policy adjustments in order to meet key targets set for 2023, state media Xinhua News Agency reported last week, marking the conclusion of the annual Central Economic Work Conference. "The proactive fiscal policy should be stepped up for its effectiveness, with a better mix of tools including fiscal deficits, special-purpose bonds and interest subsidies," the report said. Hao Hong of Grow Investment Group said while he expects supportive policies such as interest rate cuts, he doesn't think it will become its own version of quantitative easing.
QE is a policy that the U.S. Federal Reserve has previously taken to stimulate economic activity by increasing cash. "While some prominent economists are arguing for Chinese QE, recent Central Economic Work Conference suggests a more measured approach," he said.
"We believe that liquidity expansion will be structural and targeted, rather than blanket easing." -- Jihye Lee CNBC Pro: Goldman Sachs reveals outlook for Greater China tech - and names its top picks for 2023 After a tough couple of years for Chinese tech stocks, investors are now hoping that the worst is behind them. What's next for the beaten down sector? Goldman Sachs shares its outlook for Chinese tech and reveals how investors can trade the sector in 2023. Pro subscribers can read more here.
-- Zavier Ong Fed's Daly says 'nothing but hope' in inflation data, 'far away' from goal San Francisco Federal Reserve President Mary Daly said Friday she sees the recent inflation news as welcome, but it's not enough to change her view on where policy needs to go. The October and November readings for the consumer price index amounted to "good news," but "we don't see anything right now but hope in the inflation data, and I get confidence in evidence, not hope. So I'm hopeful we're on a good truck, but I won't be confident until I see repeated evidence that inflation is truly back on a path for 2% in the coming years," Daly said in a conversation hosted by the American Enterprise Institute.
"We are far away from our price stability goal," she added. Earlier this week, the Fed raised its benchmark borrowing rate by half a percentage point, the seventh hike of the year that took the funds level to a target range of 4.25%-5%. Daly, a nonvoter this year on the rate-setting Federal Open Market Committee, said her own expectations of where rates are headed is probably higher than current market pricing.
Daly votes again in 2024. --Jeff Cox CNBC Pro: Analysts love these 3 renewable energy stocks that offer more than 50% upside Renewable energy expansion is predicted to grow exponentially over the next five years, according to the International Energy Agency. The IEA predicted earlier this month that solar and wind power would grow by five times, which is equal to the clean power capacity installed over the past 20 years combined.
Given this outlook for the energy transition to renewable sources, CNBC Pro screened for stocks that could offer opportunities to investors in the sector. CNBC Pro subscribers can read more here. -- Ganesh Rao Fed is making a 'terrible mistake' by hiking further, says Wharton's Siegel Plans from the Federal Reserve to continue hiking rates into next year heighten the odds of a very difficult downturn ahead, according to Jeremy Siegel, professor of finance at the University of Pennsylvania's Wharton School of Business.
"I think the Fed is making a terrible mistake," he told CNBC's "Squawk on the Street" on Friday. "Their plan, their dot plot, is way too tight. Inflation is basically over, despite the way Chairman [Jerome] Powell characterizes it." According to Siegel, the central bank should refrain from hiking further, or keeping rates elevated next year.
"Talk of going higher and staying high in 2023, I think would guarantee a very steep recession," he said. -- Samantha Subin UBS upgrades outlook for China 2023 growth, downgrades 2022 forecast UBS upgraded its outlook for China's 2023 gross domestic product to 4.9%, versus 4.5% previously, according to its chief China economist Wang Tao, citing an earlier and faster reopening in the nation. Wang said the firm expects a weaker fourth-quarter GDP for 2022, downgrading its full-year forecast to 2.7% from 3.1%, pointing out November's weakened growth with a recent surge in Covid cases.
The firm added that the Central Economic Work Conference will likely prioritize stabilizing growth as well as supportive macro policies for the upcoming year. "We expect fiscal policy to stay proactive with small increase of headline deficit and new special LG [local government] bonds, monetary and credit policy to keep supportive with continued ample liquidity but unlikely any additional policy rate cut," Wang said in the note. -- Jihye Lee