Hong Kong stocks lead wider gains as banks rally

Sony announced a new PS5 “slim” model that is 18%-24% lighter compared to previous models and will be available for purchase in November, albeit at a higher price.

The company’s previous model had a $100 price difference between the standard and digital editions. That closes to just $50 for the versions launching November — the standard edition will cost $499.99, while the digital edition is priced at $449.99.

Sony is “keeping the price gap to $50, because obviously, they were probably losing a bit more on the hardware side, on the digital only,” Atul Goyal, managing director at Jefferies told CNBC’s “Street Signs Asia.“

— Quek Jie Ann

Exxon Mobil’s acquisition of shale rival Pioneer Natural Resources is the largest oil and gas merger in a decade, and “one for the record books,” says Raymond James’ managing director and equity research analyst Pavel Molchanov.

On Wednesday, Exxon Mobil said it agreed to buy Pioneer Natural Resources for $59.5 billion in an all-stock deal, or $253 per share. The deal marks Exxon’s biggest since it bought Mobil, and is expected to close in the first half of 2024.

While it’s a “good deal” for Exxon from a historical valuation perspective, Molchanov noted that it’s important to also recognize that Exxon’s own stock has been trading at a much lower valuation than it used to.

Exxon estimated its production volume in the Permian Basin would more than double to 1.3 million barrels of oil equivalent per day.

“It’s no coincidence that the Permian is the focus of his deal,” said Molchanov, elaborating how it is the “most prolific and economically attractive basins.”

Pioneer shares were up 1.44% at the close, while Exxon’s slipped 3.58%.

—Lee Ying Shan, Fred Imbert

As markets assess the risks from the conflict between Israel and Hamas, DBS says its impact through high oil prices on India could become more prominent if the war expanded to the oil-rich Middle Eastern countries.

The Middle East is an important trading partner for India, DBS senior economist, Radhika Rao, said as it accounted for 19% of imports, however, fixed retail pump prices will limit the impact on India’s inflation.

“If the conflict expands to more oil-producing countries with far-reaching consequences, a subsequent squeeze on oil prices will pose a policy dilemma for the economy, not helped by the busy election period ahead,” Rao added.

National elections in India are due by May 2024, but several state polls are expected to be held before then.

— Shreyashi Sanyal

India is slated to release its inflation numbers for September later Thursday, with Reuters’ analysts forecasting a 5.5% year-on-year climb.

The projected reading would compare to a 6.83% rise in August, driven largely by food prices.

“An easing in food and fuel inflation likely drove a softening in the headline rate,” a Barclays report dated early October forecasts.

That being said, the slower inflation print may still be insufficient for India’s central bank to start trimming rates.

“Even with a large step down to below 5.5%, inflation merely settles back into the upper half of the RBI’s 4+/-2% inflation target,” Mizuho’s head of economics and strategy Vishnu Varathan wrote in a daily note. He expects that the print would only provide the country’s central bank with the “comfort to hold, not cut” rates, as well as retain a “mild hawkish bias.”

The Reserve Bank of India last week kept its interest rates steady at 6.5%.

—Lee Ying Shan

Data is set to play a big role in creating new products and services while boosting productivity, and three companies are well positioned to be “winners,” according to Morgan Stanley.

The banks’ analysts chose the stocks for offering structural mid-single-digit percentage growth, high and durable margins (with adjusted earnings before interest and taxes exceeding 25%), and high cash conversion with strong market positions.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

Semiconductors are looking undervalued, thanks to the selloff in some parts of the sector, according to Morningstar.

The research firm said in a report released on Oct. 11 that it views semiconductor stocks as 15% undervalued on a median price or fair value estimate basis as of Oct. 3. That’s even more undervalued than the wider tech sector, which it believes is 5% undervalued.

It named its top stock picks in the sector.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Federal Reserve officials at their September meeting differed on the need for more policy tightening, but indicated rates would need to stay elevated until the policymakers are convinced inflation is heading back to 2%.

One more hike would be likely, minutes released Wednesday showed.

“A majority of participants judged that one more increase in the target federal funds rate at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted,” the summary of the Fed’s Sept. 19-20 policy meeting stated.

Read more about the Fed’s meeting here.

— Jeff Cox, Pia Singh

With the Israel-Hamas raising concerns about oil supplies, Citi says energy prices will likely be the main driver of the conflict’s impact on equity markets.

“Historically, equity markets are usually higher 12m after the start of geopolitical conflicts despite initial volatility. However, equities have seen significant downside when geopolitical risks catalyze energy crises,” global equity strategist David Groman said in a Tuesday note.

To be sure, Groman added that a meaningiful “geoeconomic risk” had been applied to global equity markets even prior to the outbreak of the war.

— Hakyung Kim

Demand was lackluster for $35 billion of 10-year Treasurys at the 1 p.m. ET Wednesday auction, with Treasury dealers buying 18.7% of the total supply vs a more usual 15.6% average, according to Ben Jeffery, VP for U.S. rates strategy at BMO Capital Markets. The auction resulted in a 10-year yield of 4.61%, up from 4.289% at the September auction.

Afterward, 10-year open market yields rose as high as 4.6180% against an early morning low of 4.544%.

The auction saw weak demand, with “the tail” at 1.7 basis points (0.017%), Jeffery wrote. “The tail’ measures the high yield bid minus the note’s when-issued yield. A positive tail denotes weak demand and a negative tail strong demand.

Non-dealer bidding constituted 81.3% of the total vs a usual 84.4% average, Jeffery wrote, adding that “[s]ince the result, rates have ticked higher in the follow through.”

— Scott Schnipper