- 'Party atmosphere': Skygazers treated to another aurora show
- Kyrgyzstan opens rare probe into glacier destruction
- European Mediterranean states discuss Middle East, migration
- Thunberg leads pro-Palestinian, climate protest in Milan
- Stock markets diverge before China weekend briefing
- EU questions shopping app Temu over illegal products risk
- Han Kang's books sell out in South Korea after Nobel win
- Shanghai markets sink ahead of briefing on mixed day for Asia
- Investors, analysts eye bigger China stimulus at Saturday briefing
- Musk unveils robotaxi, pledges it 'before 2027'
- At least 11 dead in Florida but Hurricane Milton not as bad as feared
- Asian markets mixed after Wall St drop, Shanghai dips before briefing
- Automaker Stellantis says CEO will retire in 2026
- Musk's promised robotaxi unveil delayed
- On US coast, wind power foes embrace 'Save the Whales' argument
- At least 10 dead in Florida after Hurricane Milton spawns tornadoes
- Internet Archive reels from 'catastrophic' cyberattack, data breach
- Wall Street stocks retreat from records on US inflation data
- Israel strikes central Beirut, killing 22
- Solar storm could impact US hurricane recovery efforts: agency
- Delta eyes Election Day travel pullback as profits climb
- Florida battered by hurricane, floods but spared 'worst-case scenario'
- UK's William and Kate in first joint public engagement since cancer treatment
- Over 200 women in legal talks with Harrods over Fayed abuse claims
- A very stiff breeze: BBC says sorry for 20,000 kph wind forecast
- Musk finally unveiling his long-promised robotaxi
- London's Frieze art fair goes potty for ceramics
- US, Europe stocks fall on US inflation data
- US consumer inflation eases to 2.4% in September
- Hurricane Milton tornadoes kill four in Florida amid rescue efforts
- South Korea's Han Kang wins literature Nobel
- Ikea posts fall in annual sales after lowering prices
- Stock markets diverge, oil gains after China rebounds
- World can't 'waste time' trading climate change blame: COP29 hosts
- South Korean same-sex couples make push for marriage equality
- Mumbai declares day of mourning for Indian industrialist Ratan Tata
- 7-Eleven owner restructures to fight takeover
- Sri Lanka recovering faster than expected: World Bank
- Hong Kong, Shanghai rally as most markets track Wall St record
- Uniqlo owner reports record annual earnings
- Hong Kong, Shanghai rally as markets track Wall St record
- Indonesia biomass drive threatens key forests: report
- Mumbai mourns Indian industrialist Ratan Tata
- China opens $71 bn 'swap facility' to boost markets
- Asian markets track Wall St record as Hong Kong, Shanghai stabilise
- 'Denying my potential': women at Japan's top university call out gender imbalance
- China's central bank says opens up $70.6 bn in liquidity to boost market
- Youth facing unprecedented wave of violence, UN envoy warns
- 'A casino in every kitchen': Brazil's online gambling craze
- Nobel chemistry winner sees engineered proteins solving tough problems
RBGPF | -1.03% | 59.49 | $ | |
RYCEF | 0.58% | 6.92 | $ | |
SCS | 2.55% | 12.93 | $ | |
CMSC | -0.14% | 24.555 | $ | |
BTI | -0.1% | 35.075 | $ | |
VOD | -0.78% | 9.665 | $ | |
RELX | 1.41% | 47.025 | $ | |
NGG | 0.85% | 66.245 | $ | |
GSK | -1.07% | 38.795 | $ | |
RIO | 0.51% | 67.18 | $ | |
BP | -0.56% | 32.16 | $ | |
JRI | 0.11% | 13.235 | $ | |
BCC | 1.98% | 141.755 | $ | |
CMSD | -0.28% | 24.7 | $ | |
BCE | 0.16% | 32.912 | $ | |
AZN | 0.29% | 77.09 | $ |
Asian markets sink as SVB contagion fears hit banking sector
Asian markets sank Tuesday, with banks bearing the brunt of the selling on fears of contagion in the sector after the collapse of two regional US lenders.
The swift closure of Silicon Valley Bank on Friday, followed by Signature Bank days later, forced US authorities to immediately pledge support for other lenders and depositors.
The move by the Federal Reserve, Treasury Department and Federal Deposit Insurance Corp. provided some reassurance to investors, but shares in several US banks were hammered on fears of a run by customers.
That came despite Joe Biden giving assurances that the nation's banking system was sound, while European leaders similarly tried to soothe investor worries.
The collapse of SVB, which specialised in venture-capital financing largely in the tech sector, was largely the result of the Fed's sharp interest rate hikes aimed at quelling inflation, which hit securities hard.
Now several commentators and leading banks say the Fed might need to pause its tightening campaign to provide some stability to financial markets -- with some even suggesting it could cut borrowing costs.
That sent the dollar tumbling Monday, though it clawed back some of those losses in Asian trade.
Yields on government bonds around the world have tumbled in light of the crisis, and analysts warn the risk of recession has grown.
"Global bond markets are suggesting a global economic slowdown, which is not great for Asia," said John Vail of Nikko Asset Management.
Equity markets were well in the red in early Asian trade Tuesday, with Tokyo, Sydney and Seoul almost two percent down, while Hong Kong, Shanghai, Singapore and Taipei suffered hefty selling.
Among banks in the region, Mitsubishi UFJ Financial and Sumitomo Mitsui Financial Group each shed more than seven percent in Japan, while Hong Kong-listed HSBC sank more than three percent.
National Australia Bank was off more than two percent and South Korea's KB Financial Group fell three percent.
Bloomberg News reported that about $465 billion had been wiped off the market value of global financial stocks in three days.
"Measures by authorities have so far prevented a US bank run on deposits but have not been enough to avert a bank run by investors," said National Australia Bank's Rodrigo Catril.
"The risk of a financial crisis remains elevated, and investors have rushed to reduce their exposure to the sector."
Stephen Innes of SPI Asset Management added that the selling came despite non-US banks having little exposure to the firms in trouble and with global financial systems being flush with cash.
"US financial stress could lead banks of all stripes to retrench lending to the real economy and tighten broader financial conditions, amplifying risk to the broader markets," he added.
"And a lower rates environment would likely hit worldwide banks' profits."
Investors were already on edge over the prospect the Fed would hike interest rates more than initially thought when it meets next week, as the economy remains in rude health and the jobs market tight.
They are now nervously awaiting the release of US consumer inflation figures this week, with a forecast-beating figure meaning a huge headache for the Fed, in light of the SVB crisis.
"A policy mistake is hands down the biggest risk in the market," Mary Manning, of Alphinity Investment Management, told Bloomberg Television.
"Controlling inflation but also addressing the fact there is some instability in the banking system is difficult."
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: DOWN 1.9 percent at 27,302.64 (break)
Hong Kong - Hang Seng Index: DOWN 1.0 percent at 19,497.75
Shanghai - Composite: DOWN 0.5 percent at 3,251.51
Dollar/yen: UP at 133.82 yen from 133.22 yen on Monday
Euro/dollar: DOWN at $1.0708 from $1.0731
Pound/dollar: DOWN at $1.2153 from $1.2181
Euro/pound: UP at 88.12 pence from 88.02 pence
West Texas Intermediate: DOWN 0.2 percent at $74.68 per barrel
Brent North Sea crude: DOWN 0.1 percent at $80.68 per barrel
New York - Dow: DOWN 0.3 percent at 31,819.14 (close)
London - FTSE 100: DOWN 2.6 percent at 7,548.63 (close)
L.K.Baumgartner--CPN