BANGKOK — Stocks rose on Friday in Asia, following a rally on Wall Street after a group of big banks offered a lifeline to First Republic Bank, the lender investors had focused on in their latest hunt for trouble in the banking industry. .
Benchmark indices rose more than 1% in Hong Kong, Taiwan and Tokyo. US futures were mixed and oil prices rose.
theThe &P 500 jumped 1.8% on Thursday, erasing earlier losses on reports that First Republic Bank may get help or be sold to another bank. Markets have turned this week on concerns about the cost to banks of the fastest set of interest rate hikes in decades. The turmoil erupted with the collapse of Silicon Valley Bank last week, the second largest bank failure in US history.
“The market remains cautious; traders don’t want to get too excited, especially when investors are still focused on what can go wrong rather than what could go right,” Stephen Innes of SPI Asset Management said in a report.
In Asia, Hong Kong’s Hang Seng jumped 1.1% to 19,422.81 and the Shanghai Composite Index added 0.8% to 3,249.23.
Tokyo’s Nikkei 225 index gained 1.2% to 27,333.79 and Seoul’s Kospi rose 0.7% to 2,394.27. Shares of major Japanese banks, which fell sharply at points this week, were mostly slightly higher.
S from Australia&P/ASX 200 added 0.4% to 6,994.80. India’s Sensex rose 0.1%, while Taiwan’s Taiex rose 1.5%.
Stocks rose Thursday on Wall Street after 11 of the biggest banks offered to help First Republic with a combined deposit of $30 billion.
Altogether, the S&P 500 rose 68.35 points to 3,960.28. The Dow gained 1.2% to 32,246.55 and the Nasdaq jumped 2.5% to 11,717.28.
Since SVB’s bankruptcy, investors have been seeking banks with similar characteristics, such as many depositors with more than the $250,000 limit that is insured by Federal Deposit Insurance Corp., or many tech startups and other highly-connected individuals who may spread worries. quickly by the strength of a bank.
First Republic Bank rose 10% on Thursday after falling as much as 36% earlier in the day.
The Federal Reserve’s barrage of faster interest rate hikes in decades to reduce inflation has shocked the banking system after years of historically easy conditions.
Higher rates increase the risk of a recession later and hurt the prices of stocks, bonds, and other investments. That last factor was one of the problems that hit Silicon Valley Bank because high rates forced the value of its bond investments down.
US Treasury Secretary Janet Yellen told a Senate committee on Thursday that the nation’s banking system “remains strong” and that Americans “can feel safe” with their deposits.
Wall Street increasingly expects this week’s turmoil to push the Federal Reserve to raise interest rates next week by just a quarter of a percentage point. That would be the same size rise as last month, half the 0.50 point rise previously expected.
The European Central Bank raised its benchmark rate by half a percentage point on Thursday, dismissing speculation that it might downsize because of all the turmoil surrounding banks.
All the stress on the banking system has raised concerns about a possible recession due to the importance of small and medium-sized banks in lending to businesses across the country. Oil prices have fallen this week on such fears.
Reports on the US economy show mixed signals. One report said fewer workers filed for unemployment benefits last week than expected.
In other trading, benchmark US crude oil gained 44 cents to $68.79 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday it rose 74 cents to $68.35 a barrel.
Brent crude, the price basis for international trade, rose 46 cents to $75.16 a barrel.
The dollar fell to 132.93 Japanese yen from 133.76 yen. The euro rose to $1.0648 from $1.0611.