APAC markets trade mixed as banking sector stress lingers

Asia-Pacific markets were mixed on Monday as investors continue to assess the impact of the banking troubles in the U.S and Europe. Deutsche Bank ended the week seeing a selloff of its U.S.-listed shares, after the German lender’s credit default swaps jumped, adding onto lingering fears of contagion from turmoil seen in banking sector.

Hong Kong’s Hang Seng index led losses in the region, trading 1.73% lower and the Hang Seng Tech index dropping 2.85%.

In mainland China, the Shanghai Composite fell 0.6%, and the Shenzhen Component lost 0.15%.

In Australia, the S&P/ASX 200 rose 0.15%, while Japan’s Nikkei 225 also gained 0.31% and the Topix climbed 0.41%. South Korea’s Kospi and Kosdaq fell 0.36% and 0.08% respectively.

Wall Street ended its session on Friday with all three major indices higher to record a winning week, with Dow Jones Industrial Average gaining 1.2% week-to-date, while the S&P 500 and Nasdaq Composite climbed 1.4% and 1.7%, respectively.

Shares of Chinese shopping platform Meituan fell over 6% on Monday, despite the company posting better results for 2022, last Friday.

Meituan posted a 21.4% year-on-year increase in revenue for the fourth quarter to 60.12 billion yuan ($8. 74 billion) while full year revenue came in 22.8% higher at 219.95 billion yuan.

Most notably, losses for Meituan narrowed substantially, dropping 79.7% in the fourth quarter to just over 1 billion yuan, while full year losses was reduced by 71.6% to come in at 6.69 billion yuan.

China’s industrial profit slumped 22.9% in the January to February period compared to a year ago, government data showed on Monday.

The reading last saw a 4% fall in industrial profit seen in December, according to Refinitiv data.

China’s industrial profit print for the latest period marked the steepest decline since April 2020, Refinitiv showed.

China’s onshore yuan slightly weakened after the report and stood at 6.8783 against the greenback.

International Monetary Fund managing director. Kristalina Georgieva said China is showing signs of robust economic recovery.

In remarks delivered in the 2023 China Development Forum, Georgieva said China’s economy is seeing a strong rebound, with the IMF’s January forecast putting China’s GDP growth at 5.2% —a sizeable increase of more than 2 percentage points from the 2022 rate.

“This matters for China, and it matters for the world,” she pointed out, saying China is set to account for around one third of global growth in 2023.

The IMF’s analysis also noted a one percentage point increase in GDP growth in China, could lead to a 0.3 percentage point increase in growth in other Asian economies, on average.

“With such a solid recovery, China can now build on positive momentum and—through comprehensive policies—stay on the growth path towards convergence with advanced economies,” Georgieva highlighted.