A man wearing a protective face mask talks on his cellphone in front of a screen showing the Nikkei index outside a brokerage in Tokyo, Japan. Picture: REUTERS/ATHIT PERAWONGMETHA
A man wearing a protective face mask talks on his cellphone in front of a screen showing the Nikkei index outside a brokerage in Tokyo, Japan. Picture: REUTERS/ATHIT PERAWONGMETHA

New York — Asian shares were mixed early on Tuesday as global investors shook off worries about a hedge fund default that roiled global banking stocks overnight, while rekindled concerns about inflation pushed bond yields higher.

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.

In Asia, the MSCI’s broadest index of Asia-Pacific shares outside Japan was marginally higher by 0.08% in early in the session on Tuesday. Hong Kong’s Hang Seng index was up 0.36% to 28,440. but in Australia a weaker tone emerged when the S&P/ASX200 slid 0.4% to its lowest point for a week. Mainland China’s CSI300 index is 0.18% higher in early trade. while Japan’s Nikkei is off 0.1%.

Nomura and Credit Suisse are facing billions of dollars in losses and regulatory scrutiny after a US investment firm, named by sources as Archegos Capital, defaulted on equity derivative bets, putting investors on edge about who else might be exposed.

Nomura shares were down a further 2.49% Tuesday after dropping by as much as 16% on Monday when it said it could take a $2bn loss from the hedge fund fallout.

Michael McCarthy, chief markets strategist at CMC Markets said the worries “are 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 spectre of inflation, he said.

Citigroup equity derivative solutions director Elizabeth Tian said investor sentiment was still closely tied to the pace of the global vaccine rollout.

“Investors will also be watching the number of Covid cases as rises in Western Europe and the Philippines sees the return of renewed restrictions while vaccination attempts threaten to stall amid supply constraints and vaccine nationalism,” Tian said. “While restrictions are increased in Europe, the UK will be relaxing stay at home rules.” 

During the Asian session, benchmark 10-year yields hit 1.7321%, up 1.4 basis points, after earlier trading marginally higher in the US after the state of New York on Monday announced people aged 30 and older could get coronavirus vaccinations starting on March 30.

Crude prices inched up on a report that Russia would back broadly stable oil output when oil cartel Opec meets this week.

On Wall Street, the Dow Jones Industrial Average rose 0.3%, the S&P 500 lost 0.09% and the Nasdaq Composite dropped 0.6%.

Reuters

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