Stocks mostly flat when Wall Street stabilizes
BEIJING (AP) – Asian shares were mixed Wednesday as concerns about the global financial system eased after three high-profile bank failures.
Shanghai followed Wall Street lower. Tokyo and Hong Kong advanced. Rise in oil prices.
Fears that the global banking system could break under the pressure of rapid interest rate hikes temporarily dispelled concerns about slowing economic growth. There has been some calm after regulators announced measures to shore up the system.
“Clearly, investors haven’t completely lost their concern,” Robert Carnell and Min Joo Kang of ING said in a report.
The Shanghai Composite index ended less than 0.1% at 3,243.19 while the Nikkei 225 in Tokyo rose 0.4% to 27,625.99. The Hang Seng in Hong Kong rose 2.2% to 20,225.65.
The Kospi in Seoul was up 0.2% at 2,430.74 while Sydney’s S&P-ASX 200 rose 0.2% to 7,046.80.
New Zealand declined while South East Asian markets gained.
On Wall Street, the benchmark S&P 500 index fell 0.2% to 3,971.27.
Most stocks in the index posted gains, but that was offset by big losses for some banks and modest losses in tech stocks. First Republic fell 2.3%, while PacWest Bancorp was down 5%. Apple and Microsoft declined.
The Dow Jones Industrial Average closed down 0.1% at 3,394.25. The Nasdaq Composite closed down 0.4% at 11,716.08.
The failure of two US banks and one in Switzerland poses a dilemma for central bankers who are trying to calm economic activity and reduce inflation that is near multi-decade highs.
The Federal Reserve and central banks in Europe and Asia will typically respond by raising rates again. But the bank failures showed institutions weakened after earlier gains, as prices for bonds and other assets on their books fell.
Traders placed bets on Tuesday that the Fed will raise rates at its next meeting in May, although a slight majority is still calling for rates to be held steady. Traders are still betting big that the Fed will have to cut rates as soon as possible this summer to prop up the economy.
Reports on the US economy are coming in mixed. The job market remains remarkably solid, while smaller corners of the economy are showing more weakness.
A report on Tuesday showed that consumer confidence is strengthening contrary to expectations.
Another report suggested that US home prices softened in December to January, but not as much as economists had expected.
In energy markets, benchmark US crude rose 37 cents to $73.57 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 39 cents to $73.20 on Tuesday. Brent crude, the price base for international oil trading, rose 14 cents to $78.28 a barrel in London. It gained 53 cents to $78.65 in the previous session.
The dollar rose to 131.72 yen from Tuesday’s 130.80 yen. The euro declined from $1.0842 to $1.0836.