Investors in Asia are worried about the banking sector’s turmoil, Asian Shares Fall on Banking Turmoil, which could cause more banks to experience an exodus of customers. This concern is overshadowing gains on Wall Street and raising the risk of a recession that many economists already saw as likely. The fear is that all the turmoil in the banking industry could cause a sharp pullback in lending to small and midsized businesses around the country. This could put more pressure on the economy.
A decline in Most Major Markets
On Friday, benchmarks declined in most major markets, while U.S. futures were higher. Regional banks’ shares in Asia were modestly lower, Asian Shares Fall on Banking Turmoil, with HSBC Holdings plc losing 3.4% in Hong Kong, while mid-sized Japanese bank Resona Holdings declined 3%.
Tokyo’s Nikkei 225 index lost 0.3% to 27,328.27, and the Kospi in Seoul gave up 0.7% to 2,406.92. Hong Kong’s Hang Seng slipped 0.2% to 20,007.19, and the Shanghai Composite index shed 0.5% to 3,268.89. In Australia, the S&P/ASX 200 edged 0.2% lower to 6,952.80. Shares fell in Bangkok and Mumbai but rose in Taiwan.
On Thursday, the S&P 500 added 0.3% for its third gain in four days, closing at 3,948.72. The Dow Jones Industrial Average gained 0.2% to 32,105.25, after seeing an early gain of 481 points evaporate. The Nasdaq composite held up better thanks to strength in technology shares, gaining 1% to 11,787.40.
Investors Remain Concerned
Despite the gains, investors remain concerned about the Federal Reserve’s hikes in interest rates. The fear is that all the turmoil in the banking industry could cause a sharp pullback in lending to small and midsized businesses around the country, which could put more pressure on the economy.
The U.S. bond market, which has been home to some of Wall Street’s wildest moves this month, saw yields fall. The yield on the two-year Treasury dropped to 3.81% from 3.97% late Wednesday. It was above 5% earlier this month.
In other trading Friday, U.S. benchmark crude oil slipped 15 cents to $69.81 per barrel in electronic trading on the New York Mercantile Exchange. It gave up 94 cents to $69.96 per barrel. Brent crude, the pricing basis for international oil, lost 17 cents to $75.33 per barrel. The U.S. dollar fell to 130.25 yen from 130.83 yen. The euro was unchanged at $1.0833.
Overall, the fear of a banking crisis and a potential recession is causing investors to worry about their investments as Asian Shares Fall on Banking Turmoil, leading to declines in most major markets. The situation is being watched closely by economists and investors alike, Asian Shares Fall on Banking Turmoil.