Shares of Asian banks slid to the lowest in more than two months, following their Wall Street peers lower on concerns that signs of trouble at a Silicon Valley-based lender could point to broader risks for the sector.
(Bloomberg) — Shares of Asian banks slid to the lowest in more than two months, following their Wall Street peers lower on concerns that signs of trouble at a Silicon Valley-based lender could point to broader risks for the sector.
The MSCI Asia Pacific Financials Index dropped as much as 1.6% to the lowest since Jan. 3, the biggest drag on the broader regional benchmark on Friday. Japan’s Mitsubishi UFJ Financial Group Inc. declined as much as 3.3%, while Commonwealth Bank of Australia and South Korea’s KB Financial Group Inc. each fell 2.7%.
The drops were mild compared with the selloff in US bank stocks, which tumbled the most in almost three years. SVB Financial Group, which specializes in venture-capital financing, sunk by a record 60% after it announced a stock offering and sold securities in a portfolio hit by heavy losses.
The stock’s plunge “will have a rippling effect on Asian banks as sentiment gets sour amid the Fed’s rate hikes,” said Tina Teng, an analyst with CMC Markets. Banks that focus on venture businesses are particularly at risk “as the loss in investment assets may not be able to cover a shortfall in deposits,” she added.
–With assistance from Youkyung Lee and Abhishek Vishnoi.
(Updates with stock moves throughout, quote in last paragraph)
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