Asian markets mixed as China cut key lending rates

Hong Kong-listed shares of Chinese technology giant Alibaba Group pared losses and were last trading 0.2% lower after announcing that co-founder Eddie Wu will succeed Daniel Zhang as Alibaba Group’s chief executive.

Wu is currently chairman of Taobao and Tmall Group, and current executive vice president Joseph Tsai will succeed Zhang as chairman of the group.

After the transition, Zhang will continue to lead Alibaba Cloud Intelligence Group as chairman and chief executive, effective Sept. 10, the company said.

– Lim Hui Jee, Clement Tan

The Reserve Bank of Australia said it had decided to raise its key interest rate to 4.1% after seeing inflation data “turn upside down” and domestic inflation taking longer to reach its target.

in minutes Released ahead of the RBA’s June meeting, central bank members revealed they were deliberating whether to raise rates or hold it pending further data.

However, the case for raising rates has been successful, inflation is already forecast to be above target for several years and it is expected that it will take longer to reach the target in Australia than in some other countries.

The RBA cited Australia’s inflation rate as rising in April, with goods inflation lower than seen in other countries.

“Services price inflation is yet to show signs of moderation and evidence from abroad may prove persistent,” the minutes added.

– Lim Hui Jee

Shares of mainland Chinese developers fell more than 3% after China cut its five-year lending prime rates more than some economists expected.

Reuters said 16 of 32 analysts polled expected a deep cut in the five-year lending prime rate of at least 15 basis points, according to a survey conducted before the announcement.

The five-year LPR, which serves as the benchmark mortgage rate, was cut by 10 basis points to 4.2%.

Real estate stocks on the Hong Kong index led the losses, with the Hong Kong mainland property index falling more than 3.5%.

Property developer Country Garden Holdings was the biggest loser on the HSI, falling 5.65%, while property investment firm Longfor Group shed 4.94%.

– Lim Hui Jee

Port congestion has largely returned to normal and the disruption related to the Covid consumption boom is “definitely behind us,” said Barash Jain. Head of Asia-Pacific Transport Research at HSBC.

“What we’re seeing now is a massive destocking happening in the U.S.,” Jain told CNBC’s “Squawk Box Asia” on Tuesday.

US port import data was down 20% year-on-year but, Jain said, it was “still better” than 2019. Normalization is also happening in air cargo, he added.

Overall inventory levels have returned to pre-Covid trends, Jain said.

— Audrey Vaughan

China cut its key one-year and five-year lending prime rates by 10 basis points each, the first cut since August.

The one-year LPR has been reduced from 3.65% to 3.55%, while the five-year LPR has been reduced to 4.20% from 4.30%. The moves reflect China cutting its short- and medium-term lending rates last week.

After the announcement, the offshore yuan weakened 0.13% to trade at 7.172 against the greenback.

– Lim Hui Jee

Japanese stocks opened higher on Tuesday after Berkshire Hathaway raised its stake in five Japanese firms by an average of more than 8.5%.

Mitsui rose 4.55%, Marubeni rose 3.44%, Mitsubishi rose nearly 4%, and Itochu and Sumitomo rose 3% each.

Japan’s top five trading companies saw renewed momentum with Warren Buffett bucking the trend as Japanese shares fell for a second straight day.

The total value of these interests exceeds Berkshire’s holdings in any country outside the United States, the company said.

– Jihye Lee, Elliott Smith, Ruxandra Eardach

The People’s Bank of China is expected to offer rate cuts to its 1-year and 5-year lending prime rates later today.

Economists polled by Reuters had forecast a 10 basis point cut in its 1-year prime rate and a 15 basis point cut in the 5-year prime rate.

China last offered cuts to its LPRs in August 2022. Investors will be closely watching today’s decision after the central bank cut its medium-term credit facility and its seven-day reverse repurchase rate.

– Jihye Lee

According to RBC analyst Tom Narayan, a global auto giant could be the next company to sign a deal with Tesla to use its Supercharger stations.

If the deal goes through, it would follow similar partnerships Tesla has agreed to with Ford and General Motors.

Investors have in the past rewarded all parties involved in the deal. The day after the deal, shares of Tesla and Ford rose 4.7% and 6.2%, respectively. Share prices of both automakers rose more than 25%.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Portfolio manager Jordan Kwetanowski looked for certain attributes in the companies he selected over the past 20 years.

The results have proven consistent throughout the global financial crisis, the era of zero interest rates – and now high interest rates.

A fund managed by Kwetanowski of Bella Funds Management outperformed its benchmark by 27% over a four-year period.

CNBC Pro subscribers can read more here.

– Weissen Don

All three major averages hit significant milestones with last week’s gains, even if Friday ended with less momentum.

Although the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite ended Friday’s session in the red, all three indexes rose for the week.

The S&P 500 rose 2.6% for the week, its strongest weekly performance since March and the fifth consecutive positive week — the first since ending a similar stretch in November 2021. The tech-heavy Nasdaq gained 3.25%. It was the first time since a 10-week streak ended in March 2019, the best week since March and the eighth positive week.

The Dow had a modest weekly gain, adding 1.25%, marking its third consecutive positive week since April this year.

—Darla Mercado, Chris Hayes