Global Market Quick Take: Asia – March 27, 2024

Equities: On its first day of being publicly listed through merging with a SPAC, Trump Media & Technology Group, ticker DJT, soared 58.8% at one point before settling at $57.99, up 16.1% from the previous closing price of the SPAC. Tesla gained 2.9% after the EV giant rolled out new initiatives to boost the adoption of its Full Self Driving system. It was a top performer within the Nasdaq 100, which fell 0.4%, while the S&P 500 slid 0.3% on Tuesday. Bucking the decline were Micron Technology, gaining 1.4%, and Seagate, surging 7.4%. However, Nvidia shed 2.6%.

In Hong Kong, market sentiments were boosted by a 3.7% surge in Tencent, along with notable gains in Baidu, Lenovo, Xiaomi, Longfor, and China Merchant Bank. The Hang Seng Index gained 1%. Baidu climbed 3.7%, driven by news of providing AI services for Apple's iPhone and other products for the China market. Xiaomi's SU7 is scheduled for an official launch on March 28th, propelling its share price by 3.2%. China Merchants Bank rose 4.3% after reporting earnings and declaring dividends exceeding expectations. In the A-share market, the CSI300 gained 0.5%.

After the Hong Kong market close, BYD reported a 15% Y/Y growth in revenue to RMB180 billion in Q4, slightly below the analyst estimate of RMB193 billion. Adjusted net income came in at RMB8.7 billion, below the RMB10.1 billion projected in Bloomberg’s survey of analysts. Gross margins slid 0.9 points from the previous quarter while rising 2.2 points from a year ago to 21.2%. However, operating margins in Q4 declined 2.1 points from Q3 and 1.0 points a year ago Q4, as the EV maker cut prices and boosted research and development, spending 32% Q/Q and 88% Y/Y more on R&D.

Alibaba called off the IPO of its logistics subsidiary, Cainiao Smart Logistics Network. This is likely to disappoint investors as the Chinese technology giant’s restructuring plan tumbles further.

FX:  The dollar recovered from early weakness to nearly unchanged against major currencies, with USDJPY at 151.50, EURUSD at 1.0830, GBPUSD at 1.2630, and AUDUSD at 0.6540.

Commodities:  Iron ore futures traded in Singapore declined by over 4% on Tuesday amid rising concerns about weak demand from Chinese steel makers.

Fixed income: Treasuries traded within a narrow range, bouncing between small gains and losses as traders awaited the PCE data, the Fed’s preferred inflation gauge this Friday. The 10-year yield ticked down 1bp to 4.23% while the 2-year yield declined by 3bps to 4.59%.

Macro:

• US Durable Goods Orders grew 1.4% in February, stronger than the median forecast of 1% but the decline in January was revised to -6.9% from -6.2%. Excluding the volatile component of transportation, orders grew 0.5% (consensus: 0.4%, prior: revised to -0.3% from -0.4%).
• Australia’s CPI grew 3.4% Y/Y in February, slightly below the 3.5% projected by economists and remained at the same rate in January. The core CPI growth decelerated to 3.9% Y/Y from 4.1% but the trimmed mean CPI came in at 3.9% Y/Y, ticking up from 3.8% the prior month.

Macro events: China Industrial Profits, France Consumer Confidence (Mar), Eurozone Economic Confidence (Mar)

Earnings: ICBC, China Life Insurance, Midea, Bank of Communications, Haier Smart Home, China Everbright Bank, CGN Power, Cintas, Paychex

In the news:

• BoE's Mann says markets are pricing in too many rate cuts (Reuters)
• Truth Social Stock Price Surges on First Day of Trading, Increasing Trump’s Fortune (WSJ)
• Alibaba Scraps Logistics Arm’s IPO After Market Turmoil Worsens (Bloomberg)
• iPhone Shipments in China Fell 33% in February, State Data Show (Bloomberg)
• BYD’s annual earnings surge 81% to all-time high on record EV deliveries, warns of weak consumer demand and global headwinds (SCMP)
• Baidu Shares Rise After Reports That Apple Will Use Its AI Services in China Products (WSJ)
• Merck’s $11.5 Billion Bet on Its Next Big Drug Finally Arrives (WSJ)
• Thailand, Philippines embrace nuclear power to cut emissions (Nikkei Asia)
• China's Xi Jinping to meet with American executives on Wednesday, sources say (Reuters)

For all macro, earnings, and dividend events check Saxo’s calendar.

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