SINGAPORE : Asian stocks rose, the dollar eased and gold hovered around its record highs on Friday, as jittery investors remained nervous about the U.S. banking sector following another rout in shares of regional lenders.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.44 per cent higher and was on course to snap its two-week losing streak. Japan remains shut for holiday, while Australia’s S&P/ASX 200 index fell 0.06 per cent.
Wall Street ended lower on Thursday after Los Angeles-based PacWest Bancorp’s move to explore strategic options deepened fears about the health of U.S.
lenders as pressure grows on regulators to take more steps to shore up the country’s banking sector.
Shares of U.S. regional banks sank this week in the wake of the collapse of First Republic Bank over the weekend that has brought back fears of a financial sector crisis.
“With the dust barely settling post Wednesday’s Fed meeting, banking sector developments have added to conviction not just that the Fed is done tightening, but that the Fed will be cutting rates before the end of the year and more aggressively than previously priced for,” said Ray Attrill, head of FX strategy at National Australia Bank.
The Federal Reserve on Wednesday raised interest rates by 25 basis points, but hinted that its marathon hiking cycle may be ending.
Markets are pricing for the Fed to stand still at its next meeting in June but expect rate cuts from July, according to CME FedWatch tool.
Source: Reuters
