Asian Markets Mixed Amid Banking Industry Uncertainty and Economic Data Reports

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Asian Markets Mixed Amid Banking Industry Uncertainty and Economic Data Reports

Asian shares saw mixed results on Monday, following gains on Wall Street at the end of last week, which came despite ongoing concerns over banks in both the US and Europe. Despite this, US futures and oil prices rose following news that the Federal Deposit Insurance Corp had agreed to sell Silicon Valley Bank, which had collapsed earlier this month, to North Carolina-based First-Citizens Bank & Trust Co. However, experts are cautious about the banking industry, with concerns over interest rates and the potential for a recession. The managing director of the International Monetary Fund, Kristalina Georgieva, said on Sunday that risks to financial stability are rising as interest rates increase to fight inflation.

Chinese markets fell after the government announced that industrial profits dropped by nearly 23% in the first two months of the year compared to the same period in 2022. Meanwhile, shares in Deutsche Bank tumbled by 8.5% in Germany on Friday, and European banks have also seen smaller declines. There are growing concerns over the health of smaller and mid-sized banks, which are viewed as riskier and could hinder lending to small and medium-sized businesses.

Friday's reports on the US economy were mixed, with orders for long-lasting manufactured goods slower than expected while business activity saw the fastest uptick in almost a year. Investors are now watching to see what the Federal Reserve and other central banks will do with interest rates, particularly given the recent spate of turmoil in the banking sector. Overall, while Asian markets have had a mixed start to the week, many remain optimistic that the global economic recovery will continue to gather pace.

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