Asian stocks tumbled on Tuesday as worries persisted about the fallout from the Silicon Valley Bank (SVB) collapse and investors awaited key U.S. inflation data later in the day for clues on the path forward for U.S. monetary tightening.
The dollar index edged up slightly in Asian trade and gold traded flat around $1,900 per ounce, while oil extended recent declines as recession fears mounted.
Chinese and Hong Kong shares fell to their lowest in more than two months, with banks and tech stocks leading losses on SVB contagion fears.
Investors also grew more cautious after media reports suggested that Chinese President Xi Jinping is slated to visit Russia as soon as next week.
On Monday, the United States, Australia and the United Kingdom announced a nuclear-powered submarine deal as part of efforts to counter the Chinese aggressive behavior in the Indo-Pacific region.
China’s Shanghai Composite Index fell 0.7 percent to 3,245.31. Hong Kong’s Hang Seng Index slumped 2.3 percent to settle at 19,247.96 despite U.S. government efforts to shore up confidence.
Japanese shares ended sharply lower as flattening yield curves weighed on the banking sector.
First Bank of Toyama shares plummeted 11.7 percent, while Mizuho Financial, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group lost 7-9 percent.
The Nikkei 225 Index plunged 2.2 percent to 27,222.04, marking its worst single-day loss in nearly four months. The broader Topix ended 2.7 percent lower at 1,947.54.
Seoul stocks plunged on concerns that the collapse of two U.S. banks may have a broader impact on the U.S. financial sector. The Kospi ended 2.6 percent lower at 2,348.97. Samsung Electronics, LG Chem, Hyundai Motor and SK Hynix lost 1-4 percent.
Australia markets closed lower, dragged down by mining, energy and financial stocks. Gold miners surged, with Northern Star and Newcrest rising 1-3 percent.
The benchmark S&P/ASX 200 Index fell 1.4 percent to 7,008.90, extending losses for a third straight session. The broader All Ordinaries index slipped 1.5 percent to close at 7,201.10.
Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index dropped 0.7 percent to 11,595.47.
U.S. stocks recovered from an early slide to end mixed overnight, while the dollar fell for a fifth day running and two-year Treasury yields saw their biggest drop since 1987 amid bets that the debacle in the banking sector could cause the Federal Reserve to pause interest rate hikes.
The Dow slipped 0.3 percent and the S&P 500 eased 0.2 percent, while the tech-heavy Nasdaq Composite rose half a percent.
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