Hong Kong stocks fall 2%, leading losses in mixed Asia trade after John Lee’s speech

It is still too early to buy both property stocks and physical property in Hong Kong, GROW Investment Group’s Chief Investment Officer William Ma said.

Speaking on CNBC’s “Street Signs Asia,” Ma said near-term investors would have to “wait and see” if Hong Kong leader John Lee’s policies to attract talent will draw people back to the city state.

Additionally, Ma expects property prices and stocks to tumble because of weak demand, adding what Hong Kong needs is “a real economic rebound.”

Ma also said Hong Kong’s financial importance will remain, and that Chinese companies still prefer to list in Hong Kong markets.

— Lee Ying Shan

Shares of Hong Kong-listed tech companies and EV makers continued to trade lower during Hong Kong leader John Lee’s policy address, dragging down the overall index alongside Macao casino stocks.

Xpeng Motors fell 8.24%, Bilibili fell 4.2%, and Meituan also fell 3.64%. Tencent and Alibaba also fell more than 2.5%.

Macao casino stocks also fell, with MGM China dropping 3.84% and Wynn Macau declining 4.15%.

Meanwhile, property stocks pared earlier gains. Country Garden was last up 0.7% after it had traded more than 4% higher ahead of Lee’s speech.

China Overseas Land and Investment was up 2.25% after rising 5% earlier.

–Jihye Lee

A top executive at Kakao Corp will step down after a fire at a data center led to a mass outage over the weekend and disrupted services for its messenger’s 53 million users worldwide.

Co-CEO Namkoong Whon apologized following the outage and said he would resign.

“I feel the heavy burden of responsibility over this incident and will step down from my position as CEO and lead the emergency disaster task force overseeing the aftermath of the incident,” Namkoong said at a press conference at the company’s office in the outskirts of Seoul on Wednesday.

Shares of Kakao traded 2.43%, slightly lower after the press conference.

–Jihye Lee

Shares of Hong Kong-listed real estate companies rose in morning trade ahead of Chief Executive John Lee’s policy address.

China Overseas Land and Investment was up 5%, CK Asset gained 2.75% and Sino Land added 2.5%. Country Garden also added 4.26% ahead of Lee’s speech.

Local media in Hong Kong are reporting that foreign property owners may receive rebates on buyer’s stamp duty.

— Abigail Ng

Shares of Apple suppliers in Asia slipped after the tech firm reportedly asked a manufacturer in China to halt the production of an iPhone 14 Plus component as Apple re-evaluates demand for the product.

The Information reported that two other suppliers that assemble modules from that component have also cut production dramatically.

LG Innotek and SK Hynix in South Korea lost around 2%, while Japan’s TDK Corporation and Murata Manufacturing shed more than 1% each.

Apple’s stock briefly lost $4 per share overnight, but closed the regular session 0.94% higher as major indexes gained.

— Abigail Ng

It’s been a choppy year for gold, with the precious metal “torn between growth and inflation risks and higher real rates and the strong dollar,” Goldman analysts wrote in an Oct. 11 note.

“In our view, there remains a lot of uncertainty around the future path of U.S. inflation, growth, rates and the central bank (CB)’s reaction functions.”

Goldman ran four different economic scenarios, and predicted where gold prices could end up in each case.

CNBC Pro subscribers can read more here.

Futures of West Texas Intermediate crude moved up around $1, or 1.33% and futures of Brent crude rose $0.83, or 0.92% as the Biden administration is expected to release more oil from the U.S. Strategic Petroleum Reserve.

The plan could be announced as early as Wednesday, sources told CNBC.

The move aims to extend the current SPR delivery program, which began this spring, through December, the sources said.

–Kayla Tausche, Jihye Lee

Economists at ANZ expect the Reserve Bank of New Zealand to deliver a hike of 75 basis points each at its upcoming meetings in November and February.

New Zealand’s central bank lifted interest rates by 50 basis points to 3.5% earlier this month, bringing the cash rate to a seven-year high.

ANZ said the Reserve Bank of Australia is likely to take a more conservative path than the RBNZ, which will result in a “much wider policy differential going forward in 2023.”

RBNZ’s next monetary policy meeting is slated to take place Nov. 23.

–Jihye Lee

Shares of Apple declined and briefly turned negative after a report from The Information that the tech giant was cutting production of its new iPhone 14 Plus.

The move by Apple, the biggest U.S. stock, brought the major averages back near their lows of the day, though they have since recovered some of that ground.

The Fed is widely expected to hike by another three-quarters of a percentage point next month, but the central bank may be reaching its limit for dictating long-term interest rates, according to The Leuthold Group’s Jim Paulsen.

“There is considerable precedent in past tightening cycles for the Fed to be shut down by the bond market “blinking” first. The Fed may soon attempt to raise the funds rate to 4%, 4.5%, or even 5%. But at some point, longer-term bonds may simply stop rising and refuse to follow the Fed’s lead,” Paulsen wrote in a note to clients on Tuesday.

The 10-year Treasury yield has traded above 4% in recent days, reaching its highest levels in more than a decade. With growing concern about a recession in 2023, it may be close to a ceiling, Paulsen said.

“Each time the Fed further tightens monetary policy, recession fears are elevated relative to inflation fears. Ultimately, as the Fed becomes more and more aggressive, recession becomes a bigger worry than inflation, and bond buyers begin outnumbering bond sellers—that is, the bond market blinks,” Paulsen added.

— Jesse Pound