Asia-Pacific markets largely down after Wall Street posts weekly loss

Morgan Stanley has identified five highly-profitable stocks with downside risk to their share price ahead of their first-quarter results.

The Wall Street bank believes stock markets have priced in a potential “over-earning” thanks to the 10% rally in the Stoxx Europe 600 index this year.

The over-earning refers to a situation in which companies or sectors have been generating higher-than-average profits or earnings compared to their historical performance.

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— Ganesh Rao

Shares of HSBC were down 0.89% on Monday.

It comes after investor advisory group ISS advised HSBC shareholders not to vote for proposals calling for the spinoff of HSBC’s Asian business at the upcoming AGM on May 5, Reuters reported.

In a note seen by the news agency, ISS said the Ping An proposal, which supported a resolution by individual shareholder Ken Lui calling for the spinoff, “lacks detailed rationale.”

Lui had put forward two resolutions calling for a review of HSBC’s business — including the spinoff and a restoration of fixed dividends, among others.

ISS is not the only one with this stance. Last week, another shareholder advisor Glass Lewis said the strategic review proposal was “not in shareholders’ interest.”

— Lim Hui Jie

Japan’s central bank is reportedly considering conducting a review of its monetary easing measures it has taken over the longer term.

Reuters, citing the Japanese Sankei newspaper, said the central bank may start discussions as soon as the next policy meeting which kicks off on Thursday. It will be the first policy meeting led by new Bank of Japan governor Kazuo Ueda.

Speaking to reporters on April 10, Ueda said “he will communicate closely with the government and guide monetary policy flexibly.”

BOJ deputy governor Shinichi Uchida, before taking the role in March, said if the BOJ were to conduct a comprehensive review of its policy framework, it could take anywhere from 12 to 18 months if the experience of U.S. and European counterparts is anything to go by.

— Lim Hui Jie

Microsoft, Alphabet and chipmaker Nvidia are usually regarded as the biggest beneficiaries of artificial intelligence’s growing popularity.

But there’s another tech giant that looks likely to be the “best possible beneficiary,” according to Ben Rogoff, a portfolio manager at Polar Capital with 25 years of investing experience.

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— Weizhen Tan

Trouble is brewing at HSBC — the largest bank in Europe is facing renewed pressure from its biggest shareholder, Chinese insurer Ping An, to restructure its business.

But Morgan Stanley is sticking to its bullish stance on the U.K.-based bank, calling HSBC its “top pick” in the sector.

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— Zavier Ong

Economic activity was stronger than expected in April, according to flash readings on services and manufacturing released Friday.

The S&P Global flash services index came in at 53.7, better than the Dow Jones estimate for 52. The manufacturing index registered a 50.4 reading, better than the expectation for 49. A reading of 50 is the dividing line between expansion and contraction in the purchase manager indexes.

Together, the S&P U.S. PMI Composite Output Index was at 53.5, an 11-month high. The services index was a 12-month high and the manufacturing number was the best in six months.

— Jeff Cox

Bitcoin hit a low of 27,833.50 on Friday, the lowest level since April 9 when it traded as low as 27,823.77.

The cryptocurrency is also on pace for the worst week since March 10, when it dropped 10.48%.

Meanwhile, Ether reached a low 1.902.31, lowest level since April 13 and is also on track for its worst week since March 10.

—Michelle Fox, Gina Francolla