Asia shares set to rise as broader worries about hedge fund default ease

Asia shares set to rise as broader worries about hedge fund default ease
Advertisement - Financial Markets Worldwide

No results matched your search

Economy2 hours ago (Mar 29, 2021 07:00PM ET)

Asia shares set to rise as broader worries about hedge fund default ease
© Reuters. FILE PHOTO: A man stands on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes in Shanghai

By Alwyn Scott

NEW YORK (Reuters) – Asian shares were set to open higher on Tuesday as investors shook off earlier worries about a hedge fund default that roiled global banking stocks overnight, while rekindled concerns about inflation pushed bond yields higher.

The firmer tone in Asia comes as Wall Street pared earlier losses driven by the banking sector on fears that issues with a defaulting hedge fund could spread throughout the banking sector.

Nomura and Credit Suisse (SIX:) are facing billions of dollars in losses and regulatory scrutiny after a U.S. investment firm, named by sources as Archegos Capital, defaulted on equity derivative bets, putting investors on edge about who else might be exposed. Shares in Nomura and Credit Suisse declined 16.3% and 13.8%, respectively, on Monday.

In early Asian trade, however, Australian were up 0.44% and {{178|Japan’s Ni had advanced 0.86%.

Michael McCarthy, chief markets strategist at CMC Markets said the worries “are very specific to a small number of hedge funds.” He said he did not expect any systemic fallout.

Still, the dollar gained on safe-haven buying, while bond prices came under pressure as the outlook for economic growth raised the specter of inflation, he added.

Benchmark 10-year yields rose to a session high of 1.728% in the U.S. after the state of New York on Monday announced people aged 30 and older could get coronavirus vaccinations starting March 30.

Crude prices inched up on a report that Russia would back broadly stable oil output when the Organization of the Petroleum Exporting Countries and allies meet this week.

Futures had earlier fallen on news that a container ship in the Suez Canal blocking traffic for nearly a week had been refloated, bringing some relief to concerns about a supply blockage.

Optimism about speedy vaccinations, the record U.S. stimulus, and robust estimates for upcoming earnings, drove the Dow and the to record closing highs last week.

On Wall Street, the rose 0.3%, the S&P 500 lost 0.09% and the dropped 0.6%.

The KBW Nasdaq Bank stock index ended 2.3% lower after falling nearly 3.5% during the session.

“There’s still chatter as to whether or not, and which, American banks may be affected,” said Quincy Krosby, chief market strategist at Prudential Financial (NYSE:) in Newark, New Jersey. “That is a question that’s lurking. But so far the market has taken (the news) in stride essentially.”

Related Articles

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Read More



Please enter your comment!
Please enter your name here