Asia markets fall as investors digest private surveys on factory activity

Mining giant BHP cut its dividend by 40% after it reported a decline in profits and revenues for the June-December 2022 half-year period.

The half-year dividend was 90 cents, down from $1.50 a year ago.

In an earnings release, BHP said revenue fell 16% year-over-year from $30.5 billion to $25.7 billion, while profit came in at $6.5 billion, down 32% compared to $9.7 billion in the year-ago period.

However, CEO Mike Henry said the company is “positive” about the demand outlook.

“We expect domestic demand in China and India to provide a counterweight to the ongoing slowdown in global trade and in the economies of the United States, Japan and Europe,” Henry said.

Shares of BHP Group in Australia traded down 1.9% after the announcement.

– Lim Hwi Ji

Minutes of the Reserve Bank of Australia’s February meeting, when it raised interest rates by 25 basis points, showed that a pause in its increases was not an option.

The statement said members discussed an increase of 25 basis points and a 50 basis point increase – the latter due to concerns that “incoming price and wage data exceeded expectations”.

She said the case for raising the benchmark interest rate by 25 basis points recognized the need for a “greater balance between supply and demand in the economy”, while noting that inflation was expected to peak.

The minutes said the central bank’s board of directors “agreed that further interest rate increases are likely to be needed over the coming months to ensure that inflation returns to target and that the current period of high inflation is only temporary.”

– Jihe Lee

Nvidia and TSMC have both made headlines in recent weeks – albeit for different reasons. What’s next for two of Wall Street’s favorite chip stocks?

Professional subscribers can read more here.

– Xavier Ong

Australian private sector output contracted for the fifth consecutive month in February, but at a slower pace since October 2022.

According to data from Juno Bank, the composite PMI in February came in at 49.2, up from the 48.5 recorded in January.

A PMI above 50 shows expansion while a reading below 50 indicates contraction in growth.

The bank noted that lower demand for Australian goods and services led to a decline in overall business activity, although the rate of decline was marginal.

He also explained that the renewed deterioration in demand affected the overall business activity, as companies listed high interest rates and economic uncertainties as reasons for weakening demand.

However, foreign demand rose as export orders in the manufacturing sector improved in February, while hiring activity continued at a “strong rate” as businesses remained upbeat and price pressures eased.

– Lim Hwi Ji

Investors are concerned after US stocks fell for three consecutive weeks, indicating the possibility of interest rates rising for longer than expected.

Despite this challenging environment, Goldman Sachs remains optimistic and expects a “soft landing” for the US economy.

However, the investment bank recommended to its clients: “Expect the best (soft drop) but insure against the worst (hard drop),” in a note published on February 17.

The investment bank has named a number of stocks that it says stand to benefit from in each scenario.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Here are the main events investors will be watching in the Asia Pacific region this week.

The US Federal Open Market Committee will release the minutes of its last meeting, which ends on February 1, later in the week.

On Monday, China will release the 1-year and 5-year loan prime rates for February. Malaysia will release its trade data later today.

On Tuesday, private pollsters will release PMI readings for Australia and Japan. The US will also release its PMI and New Zealand is due to publish its PPI for the fourth quarter.

Investors will also be watching closely for the minutes of the recent RBA interest rate decision meeting.

Japan will also release its Producer Price Index on Wednesday. The Australian Composite Index for January and the Wage Price Index for the fourth quarter will be published on this day as well.

New Zealand will also release its trade balance for the month of January on Wednesday.

The Bank of Korea will announce its interest rate decision on Thursday morning. Economists polled by Reuters expect to see the central bank pause and leave its benchmark interest rate unchanged. Singapore CPI for January will also be released.

Chinese President Xi Jinping will It said Giving a “peace speech” on the first anniversary of Russia’s invasion of Ukraine, according to Reuters.

– Jihe Lee