Hong Kong shares fall 2% as Tencent slashes Meituan stake;  Japan has a $15 billion trade deficit

Hong Kong shares fall 2% as Tencent slashes Meituan stake; Japan has a $15 billion trade deficit

The war in Ukraine is the “most important negative factor” for the global economy: the head of the IMF

Oil prices fell more than $1 on renewed concerns about Chinese demand

Oil prices fell more than 1% on growing concerns over Chinese demand as the country continued to see a surge in regional Covid cases.

Geopolitical concerns also eased after NATO clarified details of the missile that hit Poland.

US West Texas Intermediate Futures were down more than $1, or 1.26%, to trade at $84.59 a barrel. Brent crude futures it also fell 0.9% to $92.02 a barrel.

China’s National Health Commission reported 23,276 new cases of Covid-19 on Wednesday.

– Lee Ying Shan

NetEase slumps after Blizzard announces suspension of game services in China

Shares listed in Hong Kong NetEase fell 13% after Blizzard Entertainment, a sub-unit Activision Blizzardsaid it would suspend its Chinese gaming services, citing expiring licensing agreements with NetEase.

“We are extremely grateful for the passion our Chinese community has shown over the nearly 20 years we’ve been bringing our games to China through NetEase and other partners,” Blizzard said in a statement.

The company said the current license will expire on January 23.

– Jihye Lee

Meituan shares fell 6% after Tencent reduced its stake

Tencent said the share tranche is roughly 90.9% of its stake in the company and 15.5% of the total shares issued by Meituan as of Oct. 31. Tencent said it had a stake of roughly 159 billion Hong Kong dollars (roughly $20.32 billion) as of Oct. 31. close on tuesday.

Actions from Tencent also fell more than 3% in the first hour of Hong Kong trade. The company reported a drop in quarterly sales after Wednesday’s close.

– Jihye Lee

CNBC Pro: Should investors get back into tech? Here’s what the pros say and how to trade it

Australia’s unemployment rate falls slightly to 3.4%

Unemployment in Australia reached 3.4% in October, down slightly from 3.5% a month earlier, according to the Australian Bureau of Statistics.

The nation saw an overall increase in net employment of 16,800 from the previous month, the report said.

The latest figures follow a 1% rise in wages reported last quarter, the highest growth since the March 2012 quarter, according to a separate ABS report.

– Jihye Lee

Temasek writes off full FTX investment, says it has no direct cryptocurrency exposure

Singapore’s sovereign wealth fund Temasek has announced it will write off its entire investment in FTX following the firm’s rapid collapse last week.

The state-owned investor said in a statement that “in light of FTX’s financial position, we have decided to write off our entire investment in FTX, regardless of the outcome of FTX’s filing for bankruptcy protection.”

Temasek said its cost of investing in FTX was less than 0.1% of its S$403 ($294 billion) net worth portfolio – it holds less than 1% in FTX International and less than 1.5% in FTX US.

“There has been a misperception that our investment in FTX is an investment in cryptocurrencies. To clarify, we currently have no direct exposure to cryptocurrencies,” the company said.

– Jihye Lee

Japan reports a larger-than-expected trade deficit of $15 billion

Japan posted a larger-than-expected trade deficit of 2.16 trillion yen ($15.5 billion), according to the latest report from its finance ministry. Economists had expected a deficit of $11 billion, according to a Reuters poll.

Exports rose 25.3% to 9 trillion yen in October compared with the same period last year, while imports jumped 53.5% to 11.16 trillion yen.

– Jihye Lee

Retail stocks remain under pressure with few bright spots after Target’s warning

Several retail stocks fell Wednesday morning after Target’s weak financial results and sales outlook.

The target itself was 15% lower shortly after the opening bell. Nordstrom suffered a 9% drop, while Macy’s and Gap each fell about 7%.

The SPDR S&P Retail ETF fell 3.9%.

Lowe’s shares were higher, however, by 3.8% after the company said it raised its full-year profit forecast and reported strong results. Walmart held on to gain 1% after reporting strong results on Tuesday. Costco has broken into positive territory.

— Tanaya Machel

Treasury revenues are falling, fears of a recession are growing

The 10-year Treasury yield temporarily fell below 3.7% and the spread between it and the 2-year yield continued to slip deeper into the negative.

The so-called yield inversion is a recession warning. The 10-year was at 3.73% in afternoon trading after falling to 3.69%. The two-year Treasury was at 4.35%.

“I still think there is more downside risk from here. The inversion of the 2s/10s curve is negative 67. That could go into negative 75 in the near term,” said BMO’s Ian Lyngen.

He said the next target for the 10-year yield will be 3.55%. Yields fall as bond prices rise.

“The big impetus behind the rally is the market looking past the current tightening cycle and becoming increasingly nervous about the potential for more impact as the Fed continues to reiterate its willingness to take the economy into recession,” Lyngen said.

-Patti Domm

Tencent announces earnings and reportedly begins a new round of layoffs

Chinese tech giant Tencent is due to report third-quarter earnings in Asia with a delay.

The company is expected to see another drop in revenue after posting its first-ever decline in revenue in the previous quarter that ended in June. Refinitiv’s median forecast predicts a 0.47% decline to 141.7 billion Chinese yuan ($20 billion).

Separately, sources told Reuters that Tencent is launching a new round of layoffs. The news comes as tech firms around the world announce layoffs.

Shares of Tencent rose as much as 3% in early trading and were last up 0.83%, compared with a 0.81% drop in the broader Hang Seng Index.

— Abigail Ng, Jihye Lee

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