GLOBAL MARKETS DJIA 31819.14 -90.50 -0.28% Nasdaq 11188.84 49.96 0.45% S&P 500 3855.76 -5.83 -0.15% FTSE 100 7548.63 -199.72 -2.58% Nikkei Stock 27216.14 -616.82 -2.22% Hang Seng 19533.91 -162.06 -0.82% Kospi 2359.07 -51.53 -2.14% SGX Nifty* 17239.00 60.0 0.35% *March contract USD/JPY 133.71-72 +0.37% Range 133.96 133.06 EUR/USD 1.0701-04 -0.29% Range 1.0737 1.0700 CBOT Wheat March $6.722 per bushel Spot Gold $1,910.85/oz -0.1% Nymex Crude (NY) $74.50 -$2.18 US STOCKS
Two major U.S. stock indexes edged lower as investors attempted to assess what newfound stress in the banking system would mean for Federal Reserve policy.
Regional bank stocks plunged, and investors piled into government bonds to seek safety after regulators took extraordinary measures over the weekend to limit the impact of the collapse of Silicon Valley Bank.
Yet, stock investors found a possible silver lining: The rescue plan appears to shift-at least for now-the calculus on the path of Fed's interest-rate increases. Some investors are even hoping the central bank will cut interest rates this year, a sharp shift from before the bank meltdown and a move that would likely propel a rally in stocks.
The S&P 500 slipped less than 0.2% and the Dow Jones Industrial Average gave back 0.3%. However, the Nasdaq Composite gained almost 0.5%. Seven of the 11 sectors in the S&P 500 climbed, led by the utility and real-estate groups.
Goldman Sachs Group economists said they still expect rate increases in May, June and July, ultimately pushing interest rates to 5.25% to 5.5%.
ASIAN STOCKS
Japanese stocks were lower, dragged by falls in auto and financial stocks, as the yen strengthened and government bond yields dropped sharply in the wake of Silicon Valley Bank's collapse. USD/JPY was at 133.16, down from 134.35 as of Monday's Tokyo stock market close. The 5-year Japanese government bond yield was down seven basis points at 0.100%. Investors are focusing on any fallouts from the U.S. bank failure and its policy implications. The Nikkei Stock Average was down 2.0% at 27270.33.
South Korea's benchmark Kospi fell 1.5% to 2375.32 in early trade, dragged by financials and electronics stocks. The collapses of Silicon Valley Bank and Signature Bank were weighing on sentiment though Seoul officials still expect this will have a limited impact on the country because South Korean investors and banks have a relatively small exposure to the failed U.S. banks. Investors remain largely cautious ahead of the release of new U.S. inflation data later this week. USD/KRW remained flat at 1,301.90.
Hong Kong's Hang Seng Index fell 0.7% to 19554.45 amid continued concerns over the U.S. banking sector. These concerns are roiling markets as the fallout from Silicon Valley Bank's collapse is still a large unknown despite U.S. regulators' measures to stem the contagion, said Charu Chanana, market strategist at Saxo Markets, in an email. The Hang Seng Tech Index was 0.7% lower at 3863.25.
Chinese shares were lower, in tandem with other Asian equities, as contagion worries following the failure of Silicon Valley Bank persisted. "Given the on-going uncertainty over the U.S. banks and financials sector, it is likely that Asian equities will continue to whipsaw today," UOB analysts said in a note. The benchmark Shanghai Composite Index declined 0.3% to 3260.04, the Shenzhen Composite Index fell 0.2% to 2091.74 and the ChiNext Price Index slipped 0.2% to 2351.89.
FOREX
Most Asian currencies weakened against the USD in the morning session amid higher Treasury yields, which enhance the appeal of USD-denominated fixed-income assets. The greenback may also be supported by potential safe-haven demand, analysts said. The markets' nervousness is still high amid uncertainties and fears about the extent of U.S. banking sector problems, said Alvin T. Tan, head of Asia FX strategy at RBC Capital Markets, in an email. "I would be cautious on chasing the U.S. dollar lower here, given its traditional safe-haven role," Tan said. USD/KRW climbed 0.7% to 1,305.70, USD/SGD edged 0.1% higher to 1.3475 while AUD/USD was down 0.3% at 0.6648.
METALS
Gold slipped in the early morning Asian session in a likely technical correction following a recent rally spurred by concerns over the U.S. banking sector. Although the U.S. CPI data due out later is critical for the precious metal, the latest market events appear more structurally supportive for gold prices, Citi Research analysts said in a research report. The metal benefits from safe-haven inflows and recession "tail hedges", the analysts said, adding that Citi has raised its forecasts for gold prices by $75/oz to $1,875/oz for 2Q, by $50/oz to $1,900/oz for 3Q and by $50/oz to $1,950/oz for 4Q. Spot gold was down 0.1% at $1,910.85/oz.
OIL SUMMARY
Oil edged lower in the Asian morning session amid risk-off sentiment. The market has been unable to escape the broader risk-off move as market participants grapple with the spillover from Silicon Valley Bank's collapse, said ING commodities strategists in a research report. The increased volatility in the oil market which has occurred recently could persist for a while longer, with U.S. CPI data due out later today, the strategists added. Front-month WTI crude oil futures fell 0.3% to $74.60/bbl; front-month Brent crude oil futures were 0.2% lower at $80.59/bbl.
TOP HEADLINES U.S. Inflation Report Arrives as Fed Confronts Bank Failure Collapse of Silicon Valley Bank, Signature Bank Calls Fed Interest Rate Path Into Question Fed Now Expected to Rein in Rate Hikes. Market Pricing Shows Shift Amid Banks Crisis. First Republic Leads Rout in Bank Stocks Despite Emergency Measures Biden Says Banking System Is Safe After Silicon Valley Bank Collapse McConnell Released From Hospital, to Enter Rehabilitation Facility How U.S. Agreed to Provide Nuclear Sub Technology to Australia China Reopens to Foreign Tourists, Lifting Covid Visa Suspensions U.S. Skeptical of Middle East Deal Brokered by Beijing Pentagon Refocuses Spending on Weapons to Deter China Boeing Expected to Sell About 80 Dreamliners in Saudi Airline Deal United Airlines Shares Fall as Carrier Warns of First-Quarter Loss FDIC Planning Another Silicon Valley Bank Auction Volkswagen Picks Canada for First Battery Plant Outside Europe KPMG Faces Scrutiny for Audits of SVB and Signature Bank
(END) Dow Jones Newswires
03-13-23 2315ET
