Asia-Pacific markets mixed as Fed says inflation is on the decline

India’s central bank hikes 25 basis points as expected

The Reserve Bank of India raised its benchmark interest rate by 25 basis points to 6.50%, in line with expectations.

The Indian rupee strengthened 0.24% after the announcement against the U.S. dollar and last traded at 82.657.

India’s Nifty traded 0.66% higher in its first hours of trade and the S&P/Sensex rose 0.43%.

“The Reserve Bank will remain flexible and responsive towards meeting the productive requirements of the economy,” the central bank’s chief general manager Yogesh Dayal said in a statement.

– Jihye Lee

Sharp shares plunge over 11% after disappointing earnings report

Shares of Sharp listed in Tokyo fell 11.55% in Asia’s afternoon session after the company reported a net loss of 17.59 billion yen ($134 million) in its three-month period ending in Dec. 2022.

This was a steep decline from the 28.32 billion yen net profit in the same period the year before.

In its earnings presentation, the company revised its 2022 forecast, saying it expects to see a loss of 20 billion yen for its full year ending March 2023, adding that the figure was updated to reflect the “current business environment.”

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CNBC Pro: Goldman Sachs picks stocks to ride the EV wave, giving one upside of 120%

Goldman Sachs says the ecosystem surrounding the development of electric vehicles is set to see “considerable growth” through 2030.

Goldman gave one global stock huge potential upside — one of the highest among all its stock picks in the report.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Hines announces $1 billion mixed-use development in South Korea

Real estate investor Hines sees significant growth opportunities in South Korea despite rising rates as it announced plans to develop a $1 billion mixed-use complex in Busan.

Hines said in a press release that the ‘Global Quantum Complex’ in Busan will house South Korea’s first quantum computing R&D hub, as well as office and education spaces.

“We are seeing really strong rent growth and robust fundamentals – net rent growth is actually outpacing interest rate rises and cap rate gains,” Asia-Pacific CEO Raymond Lawler told CNBC’s Chery Kang in an interview.

“This time in the market provides unique opportunities ,” he said.

We're really excited about the Asia-Pacific region, real estate firm says

– Chery Kang, Jihye Lee

Japan’s current account misses estimates

Japan’s current account surplus fell to 33.4 billion yen ($254 million) in December, according to data from the Ministry of Finance.

The reading missed Reuters estimates for a 98.4 billion yen surplus and marked a sharp decline from the previous surplus of 1.8 trillion yen for November.

The Japanese yen last weakened 0.17% and stood at 131.28 against the U.S. dollar, while the yield on the 10-year Japanese government bond stood at 0.49%, near the upper ceiling of the Bank of Japan’s tolerance range of 0.5%.

– Jihye Lee

SM shares surge over 9% after Kakao proposes to increase stake to 9.05%

Shares of South Korean entertainment giant SM Entertainment climbed over 9% in Wednesday’s morning, reversing its decline of 2% on Tuesday after an announcement by South Korean internet company Kakao to increase its stake to 9.05% in the company.

Kakao announced a planned acquisition of 1.23 million shares of SM Entertainment in a 112 billion won deal (US$89.1 billion), as well as convertible bonds worth 105.6 billion won on Tuesday.

The move would make Kakao the second largest shareholder of SM Entertainment after the agency’s founder Lee Soo Man’s stake of 18.46%.

On Tuesday, the Korea Economic Daily reported that Lee will take legal action against Kakao’s move and apply for a preliminary injunction against the deal.

Shares of Kakao have also inched up slightly, trading about 0.5% higher.

–Lim Hui Jie

Softbank, Nintendo falls after posting disappointing earnings

Shares of Softbank fell roughly 5% at Japan’s open after the company posted a net loss of roughly $6 billion in its October-December quarter of 2022.

The company’s investment arm, the Vision Fund, posted a fourth straight quarter of losses in the same period.

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Shares of Nintendo also saw sharp losses of more than 6% after the company cut its sales forecast for the Nintendo Switch console, seeing a disappointing holiday season.

– Jihye Lee, Arjun Kharpal

CNBC Pro: Goldman Sachs strategist reveals the ‘cheap’ sectors to own right now

A Goldman Sachs strategist has revealed two assets that are “inexpensive” and look “cheap” in the current high-interest-rate environment.

Sharon Bell, European strategist at the investment bank, said the two value sectors are set to do well as economic growth remains robust. Goldman forecasts global GDP to grow slightly above 2% this year — higher than was forecast by economists just a few months ago.

CNBC Pro subscribers can read more about the two sectors here.

— Ganesh Rao

Economy is in the very early stages of disinflation, Powell says

The process of getting inflation down has begun, but has a long way to go, Federal Reserve Chair Jerome Powell said.

“These are the very early stages of disinflation,” he said.

It has begun in the goods sector, but the services sector – except for housing services – is not showing any signs of disinflation yet, Powell said. The process will take some time, he added.

“It’s not going to be, we don’t think, smooth. It is probably going to be bumpy and so we think that we’re need to do further rate increases, as we said, and we think we’ll need to hold policy at a restricted level for a period of time,” Powell said.

— Michelle Fox

Kashkari tells CNBC the Fed has not made enough progress yet

Minneapolis Federal Reserve President Neel Kashkari said early Tuesday that he is not lowering his rate outlook and that the central bank has not made enough progress against inflation to “declare victory.”

“We have a job to do. We know that raising rates can put a lid on inflation,” Kashkari told CNBC’s “Squawk Box.” “We need to raise rates aggressively to put a ceiling on inflation, then let monetary policy work its way through the economy.”

Kashkari warned inflation may not decline as quickly as the market is currently anticipating and that the jobs market is still too strong.

The data “tells me that so far we’re not seeing much of an imprint of our tightening to date on the labor market. There’s some evidence that it’s having some effect, but it’s pretty muted so far,” Kashkari said.

“I haven’t seen anything yet to lower my rate path, but I’m obviously keeping my eyes open and we’ll see how the data comes in,” he said.

—John Melloy, Jeff Cox

CNBC Pro: Wall Street pros reveal their top defense stocks — and the same names keep coming up

As geopolitical tensions return and defense spending ramps up, the sector is looking attractive, according to Wall Street pros.

They named their top stock picks within the theme.

Pro subscribers can read more here.

— Zavier Ong

U.S. trade deficit smaller than expected in December

The U.S. trade deficit came in smaller than economists expected for December.

December’s data showed the trade deficit at $67.4 billion. That’s a smaller deficit than the $68.5 billion expected by economists polled by Dow Jones.

But it still marks an increase from November’s $61 billion shortfall, according to FactSet data.

The data, which estimates the difference in transactions between the U.S. and foreign countries, is published by the Census Bureau and the U.S. Bureau of Economic Analysis.

— Alex Harring

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