Asian stocks recover some losses after Credit Suisse takeover

Asian stocks rose as European shares followed suit on Tuesday morning as investors assessed the risk of contagion in the financial system after the Credit Suisse takeover.

Hong Kong’s Hang Seng Index rose 0.8%, while China’s CSI 300 rose 1%. South Korea’s Kospi and Australia’s S&P/ASX 200 were up 0.2% and 0.8% respectively. Japanese markets are closed on the day of the vernal equinox.

Bank stocks also rose, with the Hang Seng Finance Index up 0.8%. HSBC and Standard Chartered each rose 2% and he 1.4%.

European futures also showed gains, with Euro Stoxx 50 and FTSE 100 contracts up 0.5% and 0.2% respectively.

Bank shares on Monday fell Asian stocks. Transactions brokered by the Swiss government Confidence in the banking sector was shaken when UBS bought rival Credit Suisse for $3.25 billion.

As part of the deal, $17 billion worth of Credit Suisse Additional Tier 1 (AT1) bonds, a type of risky bank debt designed to incur losses in times of crisis, were wiped out, Swiss financial regulator Finma said. said over the weekend.

Investors feared that bondholders would have to suffer greater losses than Credit Suisse shareholders to whom UBS shares were allotted, prompted the sale of AT1 bonds at other financial institutions.

However, Asian banks’ AT1 bonds appeared to have recovered on Tuesday. Bank of East Asia’s 5.825% perpetual dollar bond rose 3.17cts/dollar to 83.373cts while Thailand’s Kasikornbank 4% bond rose 2.365cts/bbl to 82.653cts.

European stocks rose in the morning while US stocks opened higher on Monday. The S&P 500 closed his 0.9% higher and the Nasdaq Composite rose his 0.4%.

Markets were anticipating the start of the two-day policymaker meeting at the US Federal Reserve on Tuesday.Turmoil in the global banking industry triggered by the financial crisis Silicon Valley Bankeased expectations of higher interest rates.

Futures market prices now suggest that US interest rates will peak at about 4.86% in May before falling by a quarter of a percentage point in June, ending the year at less than 4%.

Yields on two-year government bonds, which closely follow rate forecasts, rose 0.05 points to 3.98% on Tuesday, while yields on 10-year Treasuries rose 0.02 points to just under 3.50%. Yield is inversely proportional to price.

Oil markets fell on Tuesday, with US benchmark West Texas Intermediate down 1.1% to $66.90 a barrel and international marker Brent crude down 1% to $73.11.

Spot gold prices rose 0.1% to trade at $1,981.43 per troy ounce after briefly touching the highest level since March 2022 on Monday. Bitcoin is hovering around $27,960, 9 month high After a sector-wide meltdown.