Markets rise, but investors still wary of banks

HONG KONG

Asian and European markets rose yesterday, tracking a rally on Wall Street fuelled by a strong rebound in U.S. regional banks and forecast-beating jobs data that eased fears over a recession in the world’s top economy.    

But investors remain wary of any further upheaval in the U.S. financial system following last week’s turmoil that saw the sale of the embattled First Republic Bank to JPMorgan Chase.    

That followed the collapse in March of three other banks and the takeover of Credit Suisse by UBS, which sparked panic on trading floors.    

An indication last week from the U.S. Federal Reserve that it could pause its interest rate hikes - after announcing another increase - did little to soothe concerns.    

Hong Kong, Shanghai, Mumbai and Bangkok led gainers by putting on more than one percent each, while Sydney, Seoul, Taipei, Wellington and Jakarta were also in the green.    

But Tokyo was dragged down by a retreat in banks as investors returned from an extended break to play catch-up with last week’s sell-off.    

Paris and Frankfurt were slightly higher in the morning. London was closed for a holiday.          

Investors have fretted for months that the long-running program of monetary tightening aimed at defeating soaring prices will spark a recession.    

Chicago Fed chief Austan Goolsbee warned on May 6 it was “way too premature” to say if there would be another lift next month but warned the banking turmoil would likely drag on the economy.