Asian Markets Drop After Collapse Of Silicon Valley Bank: Key Updates

The collapses of Silicon Valley Bank and Signature Bank had a significant impact on global economics, with stocks losing $465 billion in market value so far.

The declines followed a drop in US counterparts, with investors worrying if a government bailout plan for the banking system will prevent further consequences from SVB's collapse. According to reports Asian lenders are seen to be more insulated from direct risk.

On Monday, depositors withdrew savings and investors sold off bank stock as the federal government rushed to reassure Americans that the banking system was secure following two bank collapses that fueled worries that more financial institutions would fail.

The Indian rupee dropped 4 paise to 82.27 versus the US dollar in early trade on Tuesday, mirroring losses in Asian markets and currencies due to concerns about the impact of the Silicon Valley Bank's collapse,

Top updates on the Silicon Valley Banking collapse:

1. Early Tuesday, the MSCI Asia Pacific Financials Index fell as much as 2.7% to its lowest level since November 29. In Japan, Mitsubishi UFJ Financial Group Inc. plunged as high as 8.3%, while Hana Financial Group Inc. in South Korea sank 4.7% and ANZ Group Holdings Ltd. in Australia declined 2.8%.

2. In a message to clients on Monday, Silicon Valley Bank N.A's new CEO, Tim Mayopoulos, stated that the bank is open and operating normally. According to the letter, all current and new deposits are insured by the financial regulator US Federal Deposit Insurance Corp (FDIC).

3. US President Joe Biden asserted that the system was secure after the second and third-largest bank collapses in the country's history occurred within 48 hours of each other. In reaction to the crisis, authorities insured all deposits at the two banks and established a programme that effectively provided a lifeline to other banks in order to protect them from a deposit run.

4. Notwithstanding the White House message, investors overwhelmingly sold bank stock. First Republic Bank shares fell more than 60% after the bank said it was receiving emergency assistance from the Federal Reserve and extra funds from JPMorgan Chase.

5. On Sunday, New York bank regulators took control of Signature Bank, ousting its leaders and turning over day-to-day control to the Federal Deposit Insurance Corp.

6. Oil prices fell on Tuesday, extending the previous day's decline, as the failure of Silicon Valley Bank shocked equity markets and fueled fears of a new financial catastrophe. Brent crude futures were down 9 cents at $80.68 per barrel at 0101 GMT. WTI crude futures in the United States fell 16 cents to $74.64 a barrel. Brent sank to its lowest level since early January on Monday, while WTI plunged to its lowest level since December.

7. Indian government bond rates are expected to continue their downward trend on Tuesday, as their US peers continue to fall, although strong local inflation readings may limit the advance. According to a private bank dealer, the 10-year benchmark 7.26% 2032 bond yield is projected to remain in the 7.30%-7.36% range after ending lower at 7.3579% on Monday. The yield closed the day at its lowest level since February 16, with the greatest single-session decline since October 4.

8. Gold prices remained above the critical $1,900 per ounce mark on Tuesday, owing to forecasts of further gradual Federal Reserve rate rises.

9. Celsius, a cryptocurrency lender, stated that it is working with advisers to transfer cash from Signature Bank to other recognized authorised depositories. "At this time, all cash belonging to the estate is secured," Celsius tweeted.

10. According to non-deliverable forwards, the rupee will start at about 82.30-82.40 to the dollar, up from 82.1225 in the previous session.