Japan’s Topix falls 3% in Asia selling on Silicon Valley Bank concerns

Declines in Japan’s Topix were led by financials, energy and consumer sentiment in Tuesday’s morning trade, Refinitiv data showed.

The index fell more than 3%, hitting its lowest levels since mid-January – with financial stocks losing more than 6%. Energy stocks saw a loss of 4.26% and consumer cyclicals fell 3.15%.

Basic materials and real estate stocks fell nearly 3%, followed by industrials and utilities.

Based on index points, Toyota Motor Corp fell the most, trading 4.37% lower. After Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group, Sony Group also fell the most, falling 3.1[ads1]%.

– Jihye Lee

Asia-Pacific banks continued to see sharp falls in trading on Tuesday morning.

Japan’s Softbank’s saw a drop of more than 3% in Tokyo’s first hour of trading as investors continued to weigh concerns over the Japanese investment powerhouse.

Banks also saw sharp losses, with Mitsubishi Ufj Financial Group down 6.92%, SMFG down more than 7% and Mizuho Financial lower at 7.34% and Nomura falling 4.6%.

Shares in South Korean defense technology company Firstec jumped more than 9%, countering the sell-off in the broader market.

Firstec makes components used in South Korean weapons systems such as guided munitions and ground vehicles.

The stock rally came after North Korea fired two short-range ballistic missiles off its east coast on Tuesday, and as Seoul and Washington conduct their biggest joint military exercises in five years.

Hanhwa Aerospace, which makes artillery and air defense systems, also rose 0.63%.

— Lim Hui Jie

China is set to resume issuing “various” visas for foreigners to enter the country, the US embassy said in a Chinese-language message translated by CNBC.

The changes announced overnight are set to take effect on Wednesday Beijing time.

Visas to enter China that were issued before March 28, 2020 will be valid again, and foreigners can enter the mainland visa-free from Hong Kong, among other changes, the notice said.

The statement indicated that China would also resume programs that allow citizens of the United States and other major countries to visit cities such as Beijing for a few days – without the need for a visa. Exact implementation remained unclear.

Mainland China tightened border controls in March 2020 in an effort to limit the domestic spread of Covid-19. The country scrapped strict quarantine requirements at the beginning of January.

-Evelyn Cheng

The dollar index was at 103.68, hovering around the weakest level since mid-February.

Asian currencies traded mixed on Tuesday morning, with the New Zealand dollar and Australian dollar both strengthening to 0.6210 and 0.6651 against the greenback respectively.

The Japanese yen weakened slightly to 133.24 against the US dollar and the offshore Chinese yuan also weakened to 6.8591 against the dollar.

The Korean won also weakened marginally to 1,297.49 against the US dollar.

The US consumer price index for February is expected to come in at 0.4% on a monthly basis or at a 6% annual pace, according to Dow Jones estimates.

This is only slightly lower than January’s inflation data of 0.5% and 6% respectively.

The CPI will be the next data point that can provide insight into the Federal Reserve’s moves ahead of the meeting on March 21 and 22.

A warm inflation report will raise expectations that the Fed may raise interest rates by 50 basis points, up from the 25 points it implemented in February.

—Lim Hui Jie, Patti Dorm

The Monetary Authority of Singapore said the exposure to Silicon Valley Bank was “negligible”.

“The banking system in Singapore has negligible exposures to these failed banks in the US,” MAS said in a statement on Monday.

“Banks in Singapore are well capitalized and conduct regular stress tests against interest rate risk and other risks,” it said, adding that their liquidity positions are healthy and supported by a “stable and diversified funding base”.

– Jihye Lee

The Federal Reserve’s top regulator will lead a review of the events that led to the implosion of Silicon Valley Bank, the central bank announced Monday.

Deputy Supervisor Michael S. Barr has been suspended from the probe, the results of which will be released on May 1. The review will focus on the review and supervision of SVB, which the Fed oversees in its role as regulator. .

“The events surrounding Silicon Valley Bank require a thorough, transparent and prompt review by the Federal Reserve,” said Chairman Jerome Powell.

-Jeff Cox

President Joe Biden said Monday that Americans can rest assured that the U.S. banking system is safe after regulators over the weekend tried to craft a plan to freeze deposits at Silicon Valley Bank and Signature Bank.

“Your deposits will be there when you need them. Small businesses across the country with deposit accounts at these banks can breathe easier knowing they will be able to pay their workers and pay their bills,” he said in brief remarks Monday before the market’s open.

Biden emphasized that no losses will be borne by American taxpayers. The management of the banks will also be replaced and bank investors will not be protected, he said.

Biden also asked Congress to look for ways to strengthen banking regulations to prevent these incidents from happening again.

—Christina Cheddar Berk

Many firms will find a higher interest rate environment very difficult to operate in, as demonstrated by the Silicon Valley Bank crisis, said Anthony Doyle, head of investment strategy at Firetrail Investments.

“There will be winners and there will be losers, and part of the challenge for investors today is to identify which companies will find this environment much more difficult than they have in a world of zero interest rates,” he said.

Still, he identified three stocks that he thinks look resilient in this new market environment.

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— Weizhen Tan