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Hong Kong shares slide 2%; Asia markets mostly fall after UBS buys Credit Suisse

This is CNBC's live blog covering Asia-Pacific markets.

Victoria Harbor and Central Financial District, Hong Kong, China.
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Asia-Pacific markets largely fell on Monday after UBS agreed to buy its banking rival Credit Suisse in a $3.25 billion takeover over the weekend.

The Hang Seng index led losses in the region, falling 2.74% and dragged down by health-care stocks. The Hang Seng Tech index was 2.66% lower.

In mainland China, the Shanghai Composite was down 0.48% to end the day at 3,234.91 , while the Shenzhen Component was 0.27% higher to close at 11,247.13. This comes after China left its one-year and five-year loan prime rate unchanged at 3.65% and 4.3% respectively.

In Australia, the S&P/ASX 200 fell 1.38% to close at 6,898.5. Japan's Nikkei 225 was down 1.42%, closing at 26,945.67 and the Topix dropped 1.54% to end at 1,929.3.

South Korea's Kospi fell 0.69% and finished at 2,379.2, but the Kosdaq bucked the trend, closing 0.6% higher at 802.2.


On Friday, U.S. stocks fell to round off a roller coaster week as investors pulled back from positions in First Republic and other bank shares amid lingering concerns over the state of the U.S. banking sector.

The Dow Jones Industrial Average lost 1.19%, the S&P 500 slid 1.10%, and the Nasdaq Composite was down 0.74%.

— CNBC's Alex Harring and Hakyung Kim contributed to this report

Inflation is preventing banks from cutting rates despite market turmoil, research firm says

The Fed and other central banks tried to 'get ahead' of dollar shortages, says research consultancy
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Fed and other central banks tried to get ahead of dollar shortages: Consultancy

While in the past, central banks would be quick to cut rates when there was market instability, the current inflationary environment is preventing them from doing so, according to Jens Nordvig, founder and CEO of macro research firm Exante Data.

Speaking to CNBC's "Squawk Box Asia," Nordvig pointed at the European Central's Bank's decision to hike rates by 50 basis points despite the troubles plaguing the banking sector, and by extension, global markets.

As such, he thinks that there is a "reluctance to panic quickly and stop the tightening process," unlike previous times, where central banks would cut rates as soon as markets showed signs of trouble.

However, with inflation "way above target," it makes it very hard for banks to switch into a cutting cycle, he points out, adding that the market has priced in 50 basis points of cuts from the U.S. Federal Reserve this year.

"The market is kind of thinking the Fed will be forced to act quickly. But the question is, can they with inflation this much above target?" he says.

— Lim Hui Jie

There is adequate liquidity in India's banking system, Kotak Mahindra Bank says

U.S. banking crisis: India's banking sector is 'very different,' Indian bank says
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U.S. banking crisis: India's banking sector is very different, says Indian bank

There is "adequate" liquidity in India's banking system and the Reserve Bank of India will continue to watch the sector closely, said Shanti Ekambaram, whole time director of Kotak Mahindra Bank.

Her comments come after the recent collapse of regional banks in the U.S, as she highlighted that India's banking system is different.

"There has been credit growth in India and you see very strong growth for the last 18 to 24 months where banks have actually been deploying money into credit," Ekambaram told CNBC's "Street Signs Asia."

"The quantum and the proportion of the balance sheet in investments deterioration, [and] the nature of the wholesale deposits, makes India's banking sector very different from what we have seen happening in the U.S.," she added.

Still, Ekambaram warned that if the global situation worsens and capital flows come to a halt, India's growth will slow down and that will affect banks in the county.

— Charmaine Jacob

Hang Seng slides over 3%, led by HSBC as biggest loser

Hong Kong's Hang Seng index led losses in the Asia-Pacific region on Monday, sliding 3%.

The largest loser on the HSI was HSBC, which slid 6.51%. Other notable names that led the top losers were hotpot chain Haidilao, which fell 6%, as well as pharmaceutical company Hansoh Pharmaceutical.

The tech focused Hang Seng Tech index saw a larger loss, down 3.36%. However, internet search company Baidu bucked the trend and gained 1.13%, one of the top gainers on the HSI and continuing its rally from Friday.

— Lim Hui Jie

Australia says banking system is 'unquestionably strong'

Christopher Kent, assistant governor of the Reserve Bank of Australia, said domestic banks are robust despite the global panic triggered by banking failures in the U.S.

"Conditions in global bond markets have been strained recently following the failure of Silicon Valley Bank in the United States," he said in a speech on Monday.

"Volatility in Australian financial markets has picked up but markets are still functioning and, most importantly, Australian banks are unquestionably strong."

Banks are already well advanced on their bond issuance plans for the year and could defer "for a while," Kent said. "Even if markets remain strained . . . Australian banks' issuance will continue to benefit from the strength of their balance sheets."

In a similar move, Hong Kong and Singapore authorities have also said that their banking systems were strong and stable.

Read full story here.

— Sumathi Bala

TD Securities: Emerging markets will perform 'pretty strongly' in the years ahead

Emerging markets will probably perform 'pretty strongly' in the years ahead, strategist says
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Emerging markets likely to perform pretty strongly in years ahead: Strategist

Emerging markets could perform "pretty strongly" in the years ahead after an "abysmal" 2022, said Mitul Kotecha, head of emerging markets strategy at TD Securities.

They may even start performing well this year "once we get through this shock," Kotecha said in reference to the collapse of regional banks in the U.S.

The financial services firm expects the U.S. dollar and U.S. treasury yields to continue to weaken this year, and that will bode well for emerging market currencies and local bonds.

"I think emerging markets will do well not just in a medium, but longer term perspective," Kotecha predicted.

— Charmaine Jacob

Hong Kong regulators say Credit Suisse branches will open for business as usual

Hong Kong's Monetary Authority and its Securities and Futures Commission announced Credit Suisse operations in the city will continue as usual, after the UBS takeover of the embattled bank over the weekend.

Credit Suisse's operations in Hong Kong comprise a branch supervised by the HKMA and two licensed corporations supervised by the SFC.

The regulators said the "customers can continue to access their deposits with the branch and trading services provided by Credit Suisse for Hong Kong's stock and derivatives markets."

"The exposures of the local banking sector to Credit Suisse are insignificant," regulators pointed out, adding that total assets of the Hong Kong branch amounted to about HK$100 billion (US$12.74 billion), representing less than 0.5% of its banking sector. 

Shares of Hong Kong banks were down sharply on Monday morning, with HSBC shedding 4.37% and being one of the top losers on the HSI, while Standard Chartered lost 3.81%.

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— Lim Hui Jie

Shares of Australian gold miners spike as gold trades near one-year high

Shares of Australian gold miners surged on Monday morning as gold prices traded near a one year high, bucking the wider trend in Australian markets.

Gold traded at $1,977.70 per ounce on Monday, its highest level since April 2022.

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Evolution Mining led the gold mining sector as its shares jumped 11.05%, while Newcrest Mining and Kingsgate Consolidated also saw gains of 5.58% and 3.36% respectively. The wider S&P/ASX 200 was down 1.2%.

— Lim Hui Jie

Credit Suisse takeover 'not expected to have an impact on Singapore's banking system': MAS

The Monetary Authority of Singapore (MAS) said on Monday that the UBS takeover of troubled rival Credit Suisse is not expected to impact the stability of Singapore's banking system.

"MAS said today that Credit Suisse Group AG will continue operating in Singapore with no interruptions or restrictions, following the announced takeover by UBS Group AG. Customers of Credit Suisse will continue to have full access to their accounts and Credit Suisse's contracts with counterparties remain in force," said MAS, in a statement on Monday.

"The takeover is not expected to have an impact on the stability of Singapore's banking system," said MAS.

MAS added that both banks do not serve retail customers, as their primary activities in Singapore are in private banking and investment banking.

The Straits Times Index fell 0.58% in early trading. Shares of DBS Bank were up 0.15% while OCBC Bank and UOB were down 0.49% and 0.18% respectively.

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— Sheila Chiang

China leaves 1-year and 5-year loan prime rates unchanged

The People's Bank of China left the loan prime rates for 1-year and 5-year unchanged, after cutting the reserve requirement ratio for almost all banks by 0.25 percentage points last week.

The 1-year LPR stayed at 3.65% while the 5-year LPR remained at 4.3%, both unchanged since August last year.

The offshore Chinese yuan strengthened 0.14% to trade at 6.8795, while the onshore Chinese yuan was flat, trading at 6.885 against the U.S. dollar.

— Lim Hui Jie

Midsize U.S. banks reportedly ask FDIC to insure deposits for next two years

The Mid-Size Bank Coalition of America has asked regulators to guarantee all deposits for the next two years, according to a Bloomberg report.

The report cited a letter from MBCA, in which the coalition argued that a deposit insurance would stop rapid withdrawals from smaller banks, stabilizing the banking sector.

MBCA proposed the banks themselves would fund the expanded insurance program by increasing the deposit-insurance assessment, said the Bloomberg report.

The coalition's request comes after U.S. Treasury secretary Janet Yellen said not all depositors will be protected over the FDIC insurance limits of $250,000 per account, despite the FDIC securing all deposits for Silicon Valley Bank and Signature Bank.

— Yeo Boon Ping

CNBC Pro: Time to buy the tech rally? Hedge fund manager Dan Niles and others reveal their top picks

The tech sector was one bright spot last week as the banking crisis rocked markets.

But is it time to buy into the rally? Market pros urge caution — but think some stocks are set to outperform.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Central banks jointly agree to enhance dollar liquidity to ease pressures

The U.S. Federal Reserve along with five other central banks have jointly announced to increase the frequency of their U.S. dollar swap line arrangements from weekly to daily.

The five central banks are the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and Swiss National Bank.

The frequency of 7-day maturity operations will increase from weekly to daily, beginning March 20 and continuing to "at least" the end of April.

In doing so, the monetary authorities said the move would "serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses."

The move comes ahead of the Fed's two-day meeting this week announce its intentions on interest rates.

— Lim Hui Jie, Jeff Cox

CNBC Pro: From Tesla to under-the-radar battery stocks: Wall Street has a playbook for the EV boom

The opportunity in global EVs is massive, with the European market alone set to be worth $300 billion by 2030, according to estimates from Bernstein.

While EV automakers may be an obvious play, Wall Street analysts have named a slew of stock picks across a range of sectors as a way to cash in.

Pro subscribers can read more here.

— Zavier Ong

FDIC to sell Signature Bank assets to unit of New York Community Bank

The FDIC announced a deal to sell "substantially all deposits and certain loan portfolios" of Signature Bank to Flagstar Bank, a subsidiary of New York Community Bancorp.

The agency said Signature's 40 former branches will begin operating under Flagstar's name on Monday.

The agreement involves $38.4 billion of Signature's assets, including $12.9 billion of loans the FDIC said were bought at a discount of $2.7 billion.

It said, however, Flagstar's bid did not include the roughly $4 billion in deposits related to Signature's digital banking business. The agency said it will provide those deposits directly to digital banking customers. The FDIC also said about $60 billion in loans will remain in receivership.

— Christine Wang

UBS buys Credit Suisse in $3.2 billion takeover

UBS finalized an agreement to buy its rival Credit Suisse for $3.2 billion. Swiss regulators played a key role in facilitating the deal in an effort to quell a contagion threatening the banking sector.

Credit Suisse saw its shares tumble last week after its largest investor, the Saudi National Bank, declined to provide additional funding. Despite subsequent measures from Credit Suisse and Swiss regulators to calm investors' fears — including a loan of up to 50 billion Swiss francs ($54 billion) — shares plunged 25.5% by the end of the week.

Under the deal, Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares. The combined bank will have $5 trillion of invested assets, according to UBS.

— Hakyung Kim

Fed's interest rate decision could be impacted by what happens over coming days, WSJ economics correspondent says

The Federal Reserve's decision on whether to raise interest rates by 25 basis points or implement no rate hike at next week's policy meeting could depend on what happens in the coming days, said Nick Timiraos, chief economics correspondent at The Wall Street Journal.

The Fed is expected to approve a quarter-point, or 25 basis point, hike to interest rates at its meeting next week. But market observers say the central bank's next decision on interest rates has been made less certain over the past week amid the bank crisis.

"I'm hearing the same thing everybody else is hearing, which is that there's a case to be made for going by 25 and there's a case to be made for skipping," he said on CNBC's "The Exchange." "I think it really depends ... on what happens with the state of the markets and this financial instability risk over the next few days."

— Alex Harring

First Republic Bank selloff intensifies as investors look to weekend

First Republic Bank took another leg lower in afternoon trading, plunging more than 30% as investors positioned themselves in the final hour of trading this week. Friday's nosedive has brought the stock down more than 70% from where it started the week.

The drop has also weighed on the SPDR S&P Regional Banking ETF (KRE), which was down 6% on Friday and poised for a weekly loss of more than 14%.

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First Republic's daily move

— Alex Harring

Major U.S. bank stocks fall a day after announcing First Republic rescue plan

Major U.S. bank stocks fell on Friday, less than a day after joining forces to funnel $30 billion worth of deposits into First Republic.

Bank of America, Wells Fargo, Citigroup and JPMorgan Chase said Thursday they would contribute about $5 billion apiece to First Republic as part of the rescue plan. Goldman Sachs and Morgan Stanley agreed to provide around $2.5 billion each.

Shares of Bank of America, JPMorgan Chase, Morgan Stanley, Citigroup and Goldman Sachs were last down about 2% each. Wells Fargo dipped about 2.4%.

Truist Financial and State Street fell about 3% each before the bell, while PNC, Bank of New York Mellon and U.S. Bancorp lost 2%. All five financial institutions said they would deposit about $1 billion each to First Republic.

Meanwhile, U.S.-listed shares of Credit Suisse dropped nearly 8% as traders considered the emergency liquidity plan.

— Samantha Subin