WORLD NEWS | Asian stocks fall after Wall Street tumbles on new bank worries

BEIJING, March 16 (AP) Asian stocks tumbled on Thursday after Wall Street slumped as Credit Suisse shares tumbled, reigniting fears of a possible banking crisis following the collapse of two U.S. banks.

Shanghai, Tokyo, Hong Kong and Sydney all fell, reversing Wednesday’s gains. Oil prices edged higher.

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Wall Street’s benchmark S&P 500 fell 0.7% on Wednesday after Credit Suisse shares plunged 30%, including a 2.1% drop at one point. That fueled concerns about the strength of global banks, which are under pressure to raise interest rates to curb inflation.

Credit Suisse’s decline “has shaken already fragile investor sentiment,” Venkateswaran Lavanya of Mizuho Bank said in a note.

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Major Asian banks were sold off heavily. Shares in Japan’s Mizuho Bank fell 3.9%, while shares in Resona Holdings, Japan’s fifth-largest lender, fell 4.8%. In Hong Kong, Standard Chartered fell 2.5 percent and HSBC fell 2.5 percent.

The Shanghai Composite Index fell 0.4% to 3,250.63 after government data showed on Wednesday that China’s economy recovered slower than expected after anti-virus controls were lifted.

Tokyo’s Nikkei 225 fell 0.9 percent to 26,974.39, while Hong Kong’s Hang Seng lost 1.3 percent to 19,297.81.

Seoul’s Kospi fell 0.2 percent to 2,375.12 and Sydney’s S&P-ASX 200 lost 1.5 percent to 6,964.80.

On Wall Street, the S&P 500 fell to 3,891.93. The Dow Jones Industrial Average fell 0.9 percent to 31,874.57 after falling more than 2 percent at one point. The Nasdaq Composite rebounded from sharp losses to close 0.1% higher at 11,434.05.

Markets pared some losses on Wednesday after the Swiss National Bank said it could provide some assistance to Credit Suisse “if needed” and the bank said it would exercise an option to borrow up to 50 billion Swiss francs ($53.7 billion).

Credit Suisse has battled troubles for years, including losses related to the collapse of investment firm Archegos Capital in 2021.

The slump in shares of Silicon Valley Bank and Signature Bank reignited concerns about the financial sector after their collapses became the second- and third-largest in U.S. history.

On Wall Street, bank stocks tumbled on Monday, recovered on Tuesday, and fell again on Wednesday.

First Republic Bank fell 21.4 percent a day after surging 27 percent. JPMorgan fell 4.7%.

Banks are in trouble after the Fed’s fastest series of rate hikes in decades sent prices for assets on their balance sheets tumbling.

In his annual letter to investors, BlackRock Chief Executive Larry Fink noted that previous eras of rising interest rates had led to “stunning financial flameouts,” such as the years-long savings and loan crisis.

“We don’t yet know if the fallout from loose monetary policy and regulatory changes will spread across the U.S. regional banking sector (similar to the S&L crisis), with more foreclosures and closures on the horizon,” he wrote.

Stress in the financial system could prompt the Federal Reserve to hold off on a rate hike at its meeting next week, or at least avoid the larger hikes it might signal. But February’s 6 percent inflation rate was still well above the Fed’s 2 percent target.

Weaker-than-expected economic reports on Wednesday may have eased some concerns.

A report showed that inflation at the wholesale level slowed far more than economists expected last month. It was still high at 4.6% compared with a year ago, but better than the 5.4% forecast.

Other data showed spending by U.S. retailers fell more than expected last month. The data could raise fears of an impending recession, but they could also reduce inflationary pressures in the short term.

As prices rose, the yield on the two-year U.S. Treasury note, the difference between the market price and what it pays at maturity, narrowed from an unusually sharp 4.25% on Tuesday to 3.89%.

In energy markets, benchmark U.S. crude rose 39 cents to $68.00 a barrel in electronic trading on the New York Mercantile Exchange. The contract plunged $3.72 to $67.61 on Wednesday. Brent crude, the benchmark for oil traded in London, rose 46 cents to $74.15 a barrel. It fell $3.76 to $73.69 in the previous session.

The dollar fell to 132.76 yen from 133.46 yen on Wednesday. The euro rose to $1.0596 from $1.0586. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the body of content may not have been modified or edited by LatestLY staff)