Asian markets fall as SVB disrupts banking sector

Hong Kong (CNN) Asian stocks fell broadly On Tuesday, fears of a Silicon Valley bank collapse dragged down bank stocks Decline The market caught on despite the US government’s efforts to stabilize the financial system.

of Japan Nikki 225 (N225) It fell 2.19% to register its third straight day of decline. of Hong Kong Hong Cheng (HSI) It briefly fell 2.5% before paring losses in the afternoon. of Korea Cosby (Cosby) Almost 3% lost. of China Shanghai Mix (SHCOMP) 0.65% down.

Banks are among the hardest hit sectors across the region.

HSBC Holdings (HBCYF) The UK unit of banking giant SVB fell more than 5% in Hong Kong after it pledged to inject 2 billion pounds ($2.4 billion) into liquidity. Bought for £1. Standard Chartered Bank fell nearly 7%.

The sale came despite US regulators taking extraordinary steps over the weekend to avert a potential banking crisis following SVB’s collapse. Lender based in California It fell at breakneck speed Friday marked the largest U.S. bank shutdown since 2008.

Investors are now on edge over whether SVB’s demise will trigger a broader banking sector Melting. On Monday, U.S. stocks were mixed, with banking stocks the winners.

“Investors fear that other financial institutions are facing significant unrealized losses on their balance sheets because of significantly higher interest rates,” DPRS Morningstar analysts said on Monday.

Fear is “regardless of fundamentals,” they said.

US Treasury yields fell sharply on Monday as investors flocked to safe-haven assets. The yield on the 2-year Treasury briefly fell more than 50 basis points, the biggest daily drop in decades.

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“At the moment, markets are speculating about a U-turn by the central bank, but are equally pricing in a high level of contagion in banking sector turmoil, which ultimately weighs on risk sentiment,” ING analysts wrote in a research note on Tuesday.

If the Federal Reserve accommodates market sentiments and ends its interest rate tightening cycle, market sentiment will have ample room to rebound, they said.

Other Asia Pacific bank stocks also fell.

In Hong Kong, shares of Bank of China (Hong Kong) and Hang Seng Bank fell 3.7% and 1.3% respectively. Pan-Asian insurer AIA Group fell 4.7%.

In Tokyo, Mitsubishi UFJ Financial Group, Japan’s biggest bank, lost 8.4%. Sumitomo Mitsui Financial Group and Mizuho Financial Group both fell more than 7%.

In Seoul, KB Financial Group and Shinhan Financial Group fell 3.6% and 2.5%, respectively.

In Shanghai, China Merchants Bank shed 1.2% and China Minsheng Banking Corp retreated 0.3%.

In Sydney, Macquarie Group retreated 3.1% and ANZ Group fell 1.5%.

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