Stocks bounce as banking fears ease, Hungary rate decision eyed

March 28 (Reuters) – Emerging market stocks rose for the first time in three sessions on Tuesday as worries over an imminent global banking crisis eased, while Hungary’s forint strengthened against the euro ahead of a key central bank decision.

The MSCI’s index for EM equities rose 0.6% after two-straight days of declines, with Hong Kong stocks rising 1%. South African stocks rose 1.3%, while Budapest shares gained 0.9%.

Investors took comfort from a deal for First Citizens BancShares to buy Silicon Valley Bank’s (SVB) assets. The deal, which was backed by US authorities, soothed worries about the banking sector following the largest bank collapse since the 2008 financial crisis and turmoil in the European banking sector.

“Risk sentiment recovered yesterday as markets appeared calmer about the health of European lenders which had generated a sell-off on Friday,” said ING strategist Frantisek Taborsky.

The MSCI’s index is set for a quarterly gain of 1.3%, which will mark its second-straight quarterly rise.

However, the overarching theme of rising interest rates, fears over growth and the banking sector have dulled the broader upbeat picture for developing economy assets that saw them come into favour in the final months of last year and the start of 2023.

The dollar eased on the day, giving way for EM currencies to gain. South Africa’s rand added 0.6%, while the Russian rouble firmed 0.2%. Mexico’s peso was also marginally higher.

Market participants also awaited a decision from the National Bank of Hungary (NBH), which is widely expected to keep its base rate steady at 13%. Analysts have also pared back rate cut views by the end of 2023 amid high inflation and the banking sector problems.

The forint firmed 0.2% at around 384 against the euro, with data showing Hungary’s gross average wages grew 16.1% year-on-year in January, the 13th-straight month of double-digit growth, although the rise trailed sky-high inflation.

“We expect rates to remain unchanged, in line with market surveys, and a hawkish tone… the forint’s return to the 400 EUR/HUF level again will not allow the NBH any hints of dovish signals,” Taborsky said.

Later in the week, the Bank of Mexico is expected to moderate the pace of its monetary tightening, and hike the benchmark interest rate by 25 basis points on Thursday as inflation has shown signs of cooling.

Brazil’s central bank is still expected to cut interest rates in November despite its hawkish policy statement indicating no room for monetary easing amid rising inflation expectations, a bank survey showed on Monday.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sharon Singleton)

Hong Kong shares rise as banking contagion fears ease; China stocks fall

Updates to market close

SHANGHAI, March 28 (Reuters) – Hong Kong stocks rose on Tuesday, as investor fears of deeper banking stress were eased after failed Silicon Valley Bank secured a buyer. Chinese shares, however, were dragged lower by information technology companies.

** Hong Kong’s benchmark Hang Seng Index .HSI climbed 1.1%, and the China Enterprises Index .HSCE added 1.2%.

** China’s blue-chip CSI300 Index .CSI300 closed down 0.3%, while the Shanghai Composite Index .SSEC lost 0.2%.

** Regional U.S. lender First Citizens BancShares FCNCA.O scooped up the assets of failed peer Silicon Valley Bank on Monday, allaying investor fears of deeper banking sector stress and prompting a rally in bank shares, while global stocks also rose.

** Additionally, the Federal Reserve’s top regulatory official plans to tell Congress that regulators are committed to ensuring all U.S. bank deposits are safe.

** Financial shares traded in Hong Kong .HSNF rose 1.4%, with HSBC Holdings 0005.HK and AIA Group 1299.HK up 1.9% and 1.6%, respectively.

** Hong Kong tech stocks .HSTECH climbed 0.9%, with Tencent 0700.HK up 4.2%.

** China’s cyberspace regulator vowed on Tuesday to clamp down on malicious online comments that damage the reputation of businesses and entrepreneurs, amid an official drive to shore up the private sector and spur economic growth.

** China’s Premier Li Qiang told foreign business executives that the country will open up further.

** “Chinese leaders are attempting to shore up foreign investors’ confidence in China after the years of the closed-door policy during the pandemic and the trend of de-globalization,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank.

** Premier Li also said China will maintain a certain level of economic expansion as it accelerates a transition towards higher quality growth, Chinese state media reported.

** Shares in computer .CSI930651, communications equipment .CSI931160 and media .CSI399971 slumped between 1.6% and 3%, after each of them jumped more than 30% this year amid a frenzy fuelled by the revolutionary computing technology ChatGPT.

** RongSheng Petrochemical Co Ltd 002493.SZ rose 10% after Saudi Aramco signed agreements to acquire 10% of the Chinese refining giant. CSI Energy Index .CSIEN was up 0.6%.

(Reporting by Shanghai Newsroom; Editing by Sonia Cheema and Eileen Soreng)

((li.gu@tr.com))

Oil prices rise on Kurdish supply risks and banking relief

NEW YORK, March 28 (Reuters) – Crude oil prices edged up on Tuesday, extending sharp gains from the previous session on supply disruption risks from Iraqi Kurdistan and hopes that banking sector turmoil is contained.

Brent crude futures settled at USD 78.65 a barrel, up 53 cents, or 0.7%. West Texas Intermediate US crude settled at USD 73.20 a barrel, gaining 39 cents, or 0.5%.

On Monday, prices rallied more than USD 3 after Iraq was forced to halt exports of about 450,000 barrels per day (bpd) from its northern Kurdistan region through Turkey after an arbitration decision confirmed Baghdad’s consent was needed to ship the oil.

“The loss of this northern Iraq oil is a problem for the market, and I think it’s being underestimated,” said John Kilduff, a partner at Again Capital in New York.

Barclays said any protracted outage of Kurdish exports until the end of the year would imply a USD 3 a barrel upside to the bank’s USD 92 a barrel Brent price forecast for 2023.

Monday’s announcement that First Citizens BancShares Inc (FCNCA) will acquire deposits and loans of failed Silicon Valley Bank (SIVB) fed hopes for the sector and sent European bank shares higher.

“Concerns over banking issues have subsided for now in temporarily relieving expectations for a recession,” said Jim Ritterbusch of consultancy Ritterbusch and Associates.

A weaker US dollar, which makes oil less expensive for international buyers, also lifted crude prices, Ritterbusch added.

Oil prices were expected to draw continued support from signs of recovering demand in China.

China’s crude oil imports are expected to rise by 6.2% in 2023 to 540 million tonnes, an annual forecast by a research unit of China National Petroleum Corp showed on Monday.

Russian Deputy Prime Minister Alexander Novak on Tuesday said Russia needed to focus on boosting energy exports to so-called friendly countries and noted that Russian oil supply to India registered a 22-fold jump last year.

US crude oil stockpiles were seen rising by about 200,000 barrels last week, a preliminary Reuters poll showed on Monday, but analysts said products like gasoline could fall.

US crude oil stocks fell by about 6.1 million barrels in the week ended March 24, while gasoline stocks fell by about 5.9 million barrels and distillate stocks rose by about 550,000 barrels, according to market sources citing American Petroleum Institute figures on Tuesday.

The US Energy Information Administration at 10:30 a.m. (1430 GMT) on Wednesday.

Pressuring oil prices were French industrial strikes that resulted in the country’s refineries being debilitated to some extent, hindering fuel deliveries throughout the country and depressing European crude prices as market players looked to sell.

(Reporting by Laila Kearney in New York; Additional reporting by Laura Sanicola, Ahmad Ghaddar, Sudarshan Varadhan and Mohi Narayan; Editing by David Gregorio and Matthew Lewis)

US bank deal allays systemic fears

March 28 (Reuters) – Asian markets could rebound on Tuesday from their sluggish start to the week, after a deal to buy the assets of stricken US bank Silicon Valley Bank (SVB) prompted a relief rally in financials and allayed fears of deeper systemic stress.

Regional US lender First Citizens BancShares said it will take on SVB’s assets of USD 110 billion, deposits of USD 56 billion and loans of USD 72 billion, and investors liked what they heard.

The S&P 500 banking index jumped 3% – First Citizen shares leapt 54% – the MSCI global financials index rose 1.2% and euro zone banks rose 1.7%.

Systemic banking crisis fears were further allayed by Fed Vice Chair for Supervision Michael Barr, who plans to tell lawmakers on Tuesday that regulators are committed to ensuring all US bank deposits are safe, according to prepared remarks.

Brent crude’s rise of over 4% was another indication that investors may be recovering their mojo in the final week of a torrid quarter. All good news, right?

Yes, but there are reasons for caution, and not just because banking crises are rarely resolved in days or weeks.

The surge of more than 20 basis points in the two-year US Treasury yield was down due to a poorly received auction as much as due to confidence that banks have turned a corner. The notes sold at a high yield of more than two basis points above where they had traded before the auction, and demand was the weakest since November 2021.

Treasury’s sale of USD 43 billion five-year notes on Tuesday and USD 35 billion of seven-year notes on Wednesday will be worth monitoring.

And crypto shares fell after the Commodity Futures Trading Commission said it had sued crypto exchange Binance and its CEO and founder Changpeng Zhao for operating an “illegal” exchange and a “sham” compliance program.

Bitcoin fell 3.5%, the third time in a week it has lost 3% or more in a single day.

There are no central bank policy decisions on Tuesday, but investors can expect a slew of headlines from central bank officials around the world to hit their screens.

In Asia, Bank of Japan governor Haruhiko Kuroda gives a speech, and finance ministers and central bank governors of the ASEAN nations attend a three-day summit in Bali. European Central Bank and Bank of England chiefs Christine Lagarde and Andrew Bailey head a raft of European policymaker events.

And the Fed’s Barr delivers his “Bank Oversight” testimony to lawmakers.

Here are three key developments that could provide more direction to markets on Tuesday:

– Australia retail sales (February)

– ASEAN finance chiefs summit

– Fed’s Barr speaks on banking sector oversight

(By Jamie McGeever; Editing by Josie Kao)

S&P 500 ends up slightly; SVB deal lifts bank shares

NEW YORK, March 27 (Reuters) – The S&P 500 ended slightly higher on Monday as a deal for Silicon Valley Bank’s assets helped to boost bank shares, while a decline in technology-related stocks limited the day’s gains.

The S&P 500 banks index rose 3.1%, while the KBW regional banking index ended up 0.6%.

JPMorgan Chase & Co (JPM) shares climbed 2.9% and Bank of America (BAC) added 5%. They were among stocks giving the S&P 500 its biggest boost on Monday.

Shares of First Citizens BancShares Inc (FCNCA) shot up more than 50% after it said it would acquire the deposits and loans of Silicon Valley Bank, which failed earlier this month in the largest bank collapse since the 2008 financial crisis.

Also, shares of First Republic Bank (FRC) were up 11.8% after Bloomberg reported US authorities were considering more support for banks, which could give the struggling First Republic more time to shore up its balance sheet.

Tech-related growth shares were lower, however, and the Nasdaq ended down on the day.

“There’s still a lot going on in the financial sector, and it’s actually good news today,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.

But tech and growth stocks have “had a very strong quarter, so there may be some profit-taking as we head into the end of the quarter.”

The Dow Jones Industrial Average rose 194.55 points, or 0.6%, to 32,432.08, the S&P 500 gained 6.54 points, or 0.16%, to 3,977.53 and the Nasdaq Composite dropped 55.12 points, or 0.47%, to 11,768.84.

Shares of Apple AAPL.O were down 1.2%. The S&P 500 technology index is up more than 16% for the quarter so far.

Crypto shares were also down Monday after the Commodity Futures Trading Commission said crypto exchange Binance and its CEO and founder Changpeng Zhao have been sued by the CFTC for operating an “illegal” exchange and a “sham” compliance program.

Among other stock gainers, Walt Disney (DIS) shares ended up 1.6% after the company began 7,000 in layoffs announced earlier this year.

Advancing issues outnumbered declining ones on the NYSE by a 2.57-to-1 ratio; on Nasdaq, a 1.44-to-1 ratio favored advancers.

The S&P 500 posted 6 new 52-week highs and no new lows; the Nasdaq Composite recorded 56 new highs and 128 new lows.

Volume on US exchanges was 10.32 billion shares, compared with the 12.9 billion average for the full session over the last 20 trading days.

(Reporting by Caroline Valetkevitch in New York and additional reporting by Amruta Khandekar and Ankika Biswas; Editing by Chizu Nomiyama and Aurora Ellis)

Gold slips more than 1% as risk appetite improves

March 27 (Reuters) – Gold prices fell more than 1% on Monday as worries over a crisis in the banking sector subsided, prompting investors to scale back safe-haven trades in favour of riskier assets like equities and crude oil.

Spot gold dropped 1.2% to USD 1,952.95 per ounce by 2:10 p.m. EDT (18:10 GMT). US gold futures settled 1.5% lower at USD 1,953.80.

There is a sense of calm in the markets and a flight back into some of the risk-on assets, and all the safety trades like gold are starting to sell off, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

A buyer for Silicon Valley Bank’s deposits and loans helped Wall Street’s main indexes open higher, sending gold further below the USD 2,000 mark breached last week.

“Much of the rally on the gold market was really short-covering,” Streible said, adding that prices were likely going to continue to come under pressure.

Recent banking sector stress and the possibility of a follow-on credit crunch bring the US closer to recession, Minneapolis Fed president Neel Kashkari said. However, US Federal Reserve officials said there was no indication financial stress was worsening.

“After kissing the psychological USD 2,000 level last week, bears exploited this resistance to attack. Appetite for the precious metal has also been dampened by a stabilising dollar and mixed signals on monetary policy from the Fed,” said Lukman Otunuga, senior research analyst at FXTM.

Last week, the Fed indicated it was on the verge of pausing further increases in borrowing costs, boosting non-yielding gold’s appeal.

On the physical front, China’s February net gold imports via Hong Kong nearly tripled from the previous month.

Spot silver fell 1.1% to USD 22.98 per ounce, platinum eased 0.6% to USD 970.81, and palladium dipped 0.2% to USD 1,412.97.

(Reporting by Bharat Govind Gautam, Deep Vakil and Ashitha Shivaprasad in Bengaluru; Editing by Krishna Chandra Eluri and Emelia Sithole-Matarise)

US mid-tier lenders gain on SVB deal, hopes of more gov’t support

March 27 (Reuters) – Shares of several mid-tier US lenders rose sharply on Monday after a buyer emerged for large chunks of embattled Silicon Valley Bank’s deposits and loans, which helped inject some calm into fragile markets.

SVB was the largest bank since the 2008 financial crisis to collapse when California regulators closed it on March 10, sparking a major turmoil in the global banking sector.

Market worries eased on Monday as First Citizens BancShares (FCNCA) agreed to a deal in which unit First–Citizens Bank & Trust Company will assume SVB assets of USD 110 billion, deposits of USD 56 billion and loans of USD 72 billion.

It also included the lender’s purchase of about USD 72 billion of SVB assets at a discount of USD 16.5 billion, the Federal Deposit Insurance Corporation, which is acting as the receiver, said.

The new assets acquired by First Citizens would add 55% to its book value per share and 30% to its earnings per share, KBW estimates.

Shares of First Citizens surged 42%, lifting other US lenders as well.

“There is relief that First Citizen Bank, one of America’s largest family-controlled banks, has come to the rescue,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“A calm of sorts has descended on the banking sector but hopes that this move will see significant stability return may be short-lived.”

Investors are keeping a close eye on First Republic Bank (FRC) as the beleaguered lender attempts to strike potential deals after losing 90% of its market value so far this month.

Its shares jumped 23% after a report said US authorities were considering more support for banks, which could give the embattled regional lender more time to shore up its balance sheet.

Shares in Keycorp (KEY) rose 8.4% and Western Alliance (WAL) 8% and Pacific West Bancorp (PACW) 11.6%. Major US banks JPMorgan Chase & Co (JPM), Citigroup (C) and Bank of America (BAC) also advanced between 1.8% and 4.2%.

Stuart Cole, head macro economist at Equiti Capital, said report of more potential support by the US government is good news. “If such a facility had already been in place, perhaps SVB would not have gone under,” he said.

European banking shares also rose 1.6% as the SVB deal eased some anxiety in the sector following a 3.8% tumble on Friday on worries around Deutsche Bank (DBKGn).

(Reporting by Joice Alves in London; Additional reporting by Medha Singh and Amruta Khandekar in Bengaluru; Editing by Amanda Cooper, Toby Chopra and Arun Koyyur)

Japan’s Nikkei bounces as weaker yen lifts sentiment

TOKYO, March 27 (Reuters) – Japan’s Nikkei index rose for the first time in three days on Monday, with a weaker yen boosting sentiment in the exporter-heavy market, but worries about a global banking crisis weighed on financial shares, capping gains.

The Nikkei ended the day 0.33% higher at 27,476.87, and was at one point in the afternoon up at a two-week high of 27,385.25.

Of the 225 component stocks, 161 were up, while 57 fell and seven were flat.

The broader Topix rose 0.33% to 1,961.84.

Among the Tokyo Stock Exchange’s 33 industry sectors, land transport was the best performer, climbing 1.78%. Banking was the biggest decliner, down 0.54%.

“Amid all the concerns about a banking crisis, for this week I expect the Nikkei to stay heavy,” said Kazuo Kamitani, a strategist at Nomura.

“For the time being, the outlook is for either sideways trading in a narrow range or edging lower,” although “the bottom looks quite firm,” particularly around 27,300, he said.

Uniqlo store operator Fast Retailing Co Ltd was the biggest support for the Nikkei, contributing 28 points to the index’s 92 point advance with a 1% gain.

Automakers were firm after the yen’s pullback from a nearly two-month high to the dollar. Suzuki Motor Corp rallied 1.37%, Subaru Corp added 0.53% and Honda Motor Co Ltd gained 0.62%

At the other end, chipmaking equipment maker Tokyo Electron Ltd was the biggest drag, erasing 43 index points with a 2.5% slide, tracking declines from Friday in US peers.

Concordia Financial Group Ltd was Nikkei’s worst-performing financial stock, losing 1.68%. Chiba Bank Ltd lost 1.2% and Shizuoka Financial Group Inc declined 1.06%. Sumitomo Mitsui Financial Group Inc fell 1.01%.

(Reporting by Kevin Buckland; Editing by Varun H K)

Easing banking crisis fears give Australia shares modest lift

March 27 (Reuters) – Australian shares eked out modest gains on Monday, as investors assessed moves made by global authorities to rein in lingering concerns over a turmoil in the global banking system, while a deal for troubled Silicon Valley Bank brought in some relief.

The S&P/ASX 200 index finished 0.1% higher at 6,962.0, after gaining as much as 0.5% earlier in the session.

The Federal Deposit Insurance Corporation (FDIC) confirmed on Monday First Citizens BancShares Inc will acquire all of Silicon Valley Bank’s deposits and loans from the regulator, bringing some respite to markets which have been roiled by worries of a credit crunch and wider banking crisis.

In Australia this week, investor focus would be on retail sales data and monthly inflation indicator for February- data sets likely to help shape expectations for the Reserve Bank of Australia’s policy meeting on April 4.

“This week attention will again be on the banking sector as markets continue to press for banking pressure points and…on the spillover effects of the banking crisis on credit flow, growth, inflation, and the path of central bank policy,” IG analyst Tony Sycamore said.

In Sydney, financials pared gains to finish 0.2% lower, after rising 0.8% earlier in the session, with two of the “Big Four” banks adding between 0.1% and 0.7%.

Meanwhile, the country’s lower house passed an emissions reduction plan with curbs on some new gas and coal investments and a cap on total greenhouse gas emissions from Australia’s biggest polluters.

Energy firms skidded 2.3% and were the only major laggards on the benchmark, with sector majors Woodside and Santos down 3.4% and 1.6%, respectively.

“Investors are seeing the updated legislation as negative- pointing to the fear that the sector is gonna take a hit in terms of gas investments and that’s why we’re seeing a weakness across the energy sector today,” said Josh Gilbert, market analyst at eToro.

The country’s top fuel supplier Ampol was among the top losers on the benchmark, falling up to 2.3% after it flagged a hit to gasoline production at its refinery in Queensland.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index edged up 0.3% to 11,612.9 points.

(Reporting by Riya Sharma in Bengaluru; Editing by Nivedita Bhattacharjee)

Oil rises over USD 3 on Kurdistan export halt, banking optimism

HOUSTON, March 27 (Reuters) – Oil prices rose more than USD 3 on Monday as a halt to some exports from Iraq’s Kurdistan region added to worries about oil supplies while a US banking acquisition eased worries that financial turmoil could hurt the economy and curtail fuel demand.

Brent crude futures settled up USD 3.13, or 4.2%, at USD 78.12 a barrel. West Texas Intermediate US crude closed USD 3.55, or 5.1%, higher at USD 72.81.

Brent gained 2.8% last week while WTI rebounded by 3.8% as jitters in the banking sector eased.

Prices received a lift as Turkey stopped pumping crude from Kurdistan via a pipeline following an arbitration decision that confirmed Baghdad’s consent was needed to ship the oil. The exports amount to about half a percent of global oil supply, or 450,000 barrels per day (bpd).

Loss of oil supplies from Kurdistan could offset the impact of Russian production and supplies finding their way to market, said John Kilduff, partner at Again Capital LLC in New York. It also could force production cuts in the Kurdistan region.

“Now we have this new wrinkle here…. It’s production that we really can’t afford to lose,” Kilduff said, adding that the loss of supply would amplify any other future force majeure or production outages.

First Citizens BancShares Inc (FCNCA) said it will acquire deposits and loans of failed Silicon Valley Bank (SIVB), closing one chapter in the crisis of confidence that has roiled financial markets.

“Oil prices are edging higher extending gains from the previous week as investors weighed up efforts by the authorities to calm concerns regarding the global banking system,” said Fiona Cincotta, senior financial markets analyst at City Index.

There are also hopes for extra support for bank funding after reports that US authorities were in early deliberations about expanding emergency lending facilities.

Wall Street equities gained as the banking deal offered a respite after weeks of turmoil.

Oil prices also drew support from worries of geopolitical turmoil after Russian President Vladimir Putin’s plans to station tactical nuclear weapons in Belarus, one of Russia’s most pronounced nuclear signals yet.

Russian Deputy Prime Minister Alexander Novak has said Moscow is close to achieving its target of cutting crude output by 500,000 barrels per day (bpd) to about 9.5 million bpd.

Still, Russia’s crude exports are expected to remain steady as it cuts refinery output in April, data from industry sources and Reuters calculations showed on Friday.

On the demand side, China’s crude oil imports are expected to rise 6.2% in 2023 from last year’s level to 540 million tons, according to an annual forecast by a research unit of China National Petroleum Corp on Monday.

Investors were waiting for US inventory data. US crude oil stockpiles were seen rising about 200,000 barrels last week, a preliminary Reuters poll showed on Monday.

The American Petroleum Institute (API), an industry group, will publish its inventory data at 4:30 p.m. EDT on Tuesday and the US Energy Information Administration at 10:30 a.m. on Wednesday.

(Reporting by Arathy Somasekhar, additional reporting by Noah Browning in London, Mohi Narayan in New Delhi and Florence Tan in Singapore; Editing by Jason Neely, David Goodman, Ken Ferris and David Gregorio)

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