Stock markets were mixed on Friday as concerns over the health of the global banking system dragged US lenders’ shares down more than 14 percent this week.
The FTSE All-World stock index fell 0.1 percent during Asian trade on Friday but rose 1.6 percent on the week. Technology stocks in Asia initially followed the Nasdaq Composite higher on hopes that the US Federal Reserve’s monetary tightening cycle is nearing its end.
Hong Kong’s Hang Seng Tech Index rose as much as 2.3 percent on Friday before gaining just 0.1 percent. Other benchmarks in the region posted modest losses, including a 0.3 percent decline for China’s CSI 300. Gains for technology stocks in Asia followed a 1 percent increase for the Nasdaq Composite Index on Thursday.
Futures sent the FTSE 100 stock index down 0.6 percent at the London open, while the S&P 500 was expected to rise 0.2 percent.
The broader S&P 500 returned just 0.3 percent, with financial stocks struggling to recover aReported Mediaser the collapse of the US Silicon Valley bank Rescue of the Swiss lender Credit Suisse from competitor UBS.
The KBW Nasdaq Bank index ended Thursday’s session down 1.7 percent, even aReported Mediaser comments from US Treasury Secretary Janet Yellen that regulators “stand ready to take additional action where warranted” to address the issue to ensure safety of bank deposits. The US banking index has lost almost 30 percent in the past two weeks.
The US Federal Reserve continued to hike interest rates by 0.25 percentage points on Wednesday. The Bank of England also raised interest rates by 0.25 percentage points on Thursday.
Citigroup strategist Dirk Willer said it was “too early to say” whether stress in the banking sector had become large enough to significantly affect the US business cycle. But he added that the Fed has “become more cautious, as has the ECB” amid heightened uncertainty.
“We remain negative on risky assets as bank stress tightens credit and reinforces Citi’s call for a US recession [the second half] 2023,” Willer said.
In foreign exchange markets, the dollar index – which tracks the value of the greenback against a basket of other currencies – fell 0.1 percent, while US 10-year Treasury yields fell 0.04 percentage point to 3.385 percent.
