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Asia markets mostly lower, South Korea shares rise as defense sector gains

A view of Singapore’s skyline and Marina Bay.
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This is CNBC's live blog covering Asia-Pacific markets.

Asia-Pacific markets were mostly lower Monday at the start of the penultimate week of 2023, while South Korean shares bucked the trend as defense stocks led gains.

Most Asia-Pacific markets rallied last week following the U.S. Federal Reserve's decision to hold rates and its roadmap for rate cuts in 2024 and 2025.

The Bank of Japan will meet for the last time this year. A note from Dutch bank ING said it expects the BOJ to maintain all its major policy settings, "though the overall tone about future policy at the press conference and statement could start to soften."

A Reuters poll of economists also expects the BOJ to maintain its benchmark interest rate at -0.1%.

Separately, China will release its loan prime rates on Wednesday, while inflation data from Japan is due Friday.

In Australia, the S&P/ASX 200 closed 0.22% lower at 7,426.40, snapping a six-day winning streak.

Japan's Nikkei 225 dropped 0.64% to end at 32,758.98, while the Topix fell 0.66% to 2,316.86.

South Korea's Kospi reversed earlier declines to close 0.13% higher at 2,566.86; the small-cap Kosdaq rose 1.51% to end at 850.96.

Shares of defense companies were broadly higher. Korea Aerospace Industries' stock and Hyundai Rotem were up about 1% each, but shares of Hanhwa Aerospace dipped.

Hong Kong's Hang Seng index dropped by about 1% during its final hour of trading, while the mainland Chinese CSI 300 inched lower by 0.36% to notch a four-day losing streak and hit fresh four-year lows.

On Friday in the U.S., markets ended mixed, and with the Dow Jones Industrial Average up 0.2% and setting a new intraday record and the Nasdaq Composite 0.4% higher. The Nasdaq-100 ended Friday at 16,623.45, topping a record close dating back to November 2021.

In contrast, the S&P500 slipped marginally, but still logged gains for a seventh straight week to mark its longest winning streak since 2017.

— CNBC's Brian Evans and Alex Harring contributed to this report.

South Korean defense stocks outperform broader markets

South Korean defense stocks were higher by midday trading on Monday, outperforming the broader Kospi.

Shares of defense companies were broadly higher. Korea Aerospace Industries' stock was up 1.05%, Hyundai Rotem up 0.95%, Victek up 1.23%, Firstec up 1.23%, Speco up 0.60% and LIG Nex1 up over 5%. But shares of Hanhwa Aerospace were near flat, hovering below the flatline.

The Kospi gained about 0.3% higher by midday trading after opening near the flat line.

North Korea reportedly fired what appeared to be a long-range ballistic missile on Monday, its second missile launch in less than 12 hours, according to South Korea's military. It comes as Pyongyang condemned a U.S.-led show of force against the nuclear armed state.

From 2018 to 2022, South Korea was the ninth largest weapons supplier globally, ahead of Israel, the Netherlands and Turkey, according to the Stockholm International Peace Research Institute.

— Shreyashi Sanyal

Singapore's November non-oil domestic exports growth misses expectations

Singapore's non-oil domestic exports grew at a much slower-than-expected pace in November, according to government data.

NODX grew 1% year-on-year in November, with declines in electronic products. The reading was far below a Reuters poll forecast of a 2.3% rise.

NODX to the top markets — Taiwan, the European Union and Indonesia — declined in November 2023, according to the data.

Exports to the United States, China, Thailand and Hong Kong rose.

The Straits Times index fell 0.54% in early trading on Monday.

— Shreyashi Sanyal

New Zealand services sector swings into expansion in November

New Zealand's services sector recorded an expansion in November, according to a survey.

The Bank of New Zealand-BusinessNZ Performance of Services Index (PSI) was at 51.2 in November, up 2 points from October, but below the survey's long-term average of 53.5.

A PSI reading above 50 indicates that the service sector is expanding and below 50 that it is declining.

BNZ senior economist Doug Steel said that "despite November's lift, the PSI remains below its long-term norm of 53.5. And the combination of contracting activity/sales and rising inventories raises questions about the sustainability of the nudge higher."

The New Zealand dollar was 0.35% higher against the dollar, while stocks in the region were largely flat.

— Shreyashi Sanyal

SenseTime shares tumble as much as 14% after AI firm's founder dies

Shares of artificial intelligence company SenseTime plunged as much as 14.2% after the company announced the death of its founder, Tang Xiao'ou, on Sunday.

In a filing to the Hong Kong Exchange, SenseTime said that Tang died due to "health issues" on Dec. 15.

In a separate announcement, SenseTime said that the business operations of the company will continue to be led by executive chairman and CEO Xu Li, and Tang's death is not expected to have a material impact on the business of SenseTime.

— Lim Hui Jie

CNBC Pro: ‘Poised to pounce’: Jefferies names its top global stocks for 2024 — giving 3 over 60% upside

Jefferies is "poised to pounce" on several global stocks as it looks ahead to the new year, giving three stocks more than 60% upside potential.

Those stocks, which are among its "top picks for 2024," include companies with strong cash flows and attractive risk-reward ratios, the investment bank's analysts wrote in a Dec. 7 equity research note.

Jefferies is bullish on three stocks — giving three over 60% upside.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

CNBC Pro: As stocks rally, UBS names the 'most crowded short in any sector' for December

As financial markets continue rallying, UBS has named the "most crowded short" across all sectors and global markets.

Crowded trades refer to a situation in which a large number of investors hold similar views and concentrated positions on certain stocks or markets.

Nearly one in five shares of the most shorted European stock tracked by UBS were used to bet on a price decline.

CNBC Pro subscribers can read more here.

— Ganesh Rao

NY Fed's Williams pushes back on market assumption rate cuts are around the corner

New York Federal Reserve President John Williams said Friday on CNBC's "Squawk Box" that the central bank isn’t "really talking about rate cuts right now." Instead, "We're very focused on the question in front of us, which as chair Powell said... is, have we gotten monetary policy to sufficiently restrictive stance in order to ensure the inflation comes back down to 2%? That's the question in front of us."

Traders are betting that the central bank will cut rates more than three times, according to fed funds futures trading at the CME. Futures markets indicate that the Fed could start cutting rates as soon as March.

"I just think it's just premature to be even thinking about that," Williams said, when asked about futures pricing for a rate cut in March. Williams said that if the trend of lower inflation were to reverse, the central bank stands ready to tighten policy again.

— Yun Li, Scott Schnipper

Oil books modest gain for the week after string of losses

Oil prices settled lower on Friday, but rose slightly for the week on a weaker dollar and improved 2024 demand outlook after a string of recent losses.

The West Texas Intermediate contract for January fell 15 cents, or .21%, to settle at $71.43 a barrel. The Brent contract for February shed 6 cents, or .08%, to settle at $76.55

Yet U.S. crude and the global benchmark gained less than 1% for the week after prices rallied Thursday on a weaker dollar and the International Energy Agency raising its 2024 demand growth outlook.

It was the first positive note for crude prices after seven weeks of losses.

— Spencer Kimball

Stocks could see volatile trading as S&P 500 and Nasdaq-100 go through quarterly rebalance

Friday could be a volatile trading session for stocks thanks to the S&P 500 and Nasdaq-100 rebalancing their indexes. The process will see Uber join the S&P 500, while DoorDash and MongoDB will be added to the Nasdaq-100.

A looming concern that could be reflected in the process is investors considering concentration risks, as well as worry that some stocks may have an oversized weighting going into their respective indexes.

— Brian Evans

Boeing heads for longest weekly win streak since 2005

Boeing is on pace for its longest weekly positive streak in 18 years.

With just hours left in Friday's session, the airplane maker is poised to finish the trading week more than 8% higher. If that holds, it would mark its seventh winning week in a row — a first of that length since late 2005.

Boeing, which is up more than 3% on Friday, is also slated to notch its eighth straight winning day. The stock last saw a streak that long during a nine-day rally in October 2022.

The company shared leadership appointments over the course of the week. Stephanie Pope was tapped as operations chief, while Brian Moran will lead sustainability.

— Alex Harring, Nick Wells

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