SYDNEY – Asian shares extended losses on Thursday as troubles at US lender First Republic Bank continued to unnerve investors amid concerns that growth in the world’s biggest economy could very well surprise to the downside.
MSCI’s broadest index of Asia-Pacific shares outside Japan were 0.3 percent lower on Thursday, while Japan’s Nikkei lost 0.4 percent. China’s blue chips were flat, but Hong Kong’s Hang Seng Index slid 0.3 percent.
Geopolitics also cast a pall over markets. US Commerce Secretary Gina Raimondo said on Wednesday that Chinese cloud computing companies like Huawei Cloud and Alibaba division Alibaba Cloud could pose a threat to US security and vowed to review a request to add them to an export control list.
But tech giants bucked the gloom, with Nasdaq futures up 0.4 percent in early Asian hours as Facebook owner Meta soared 12 percent after the bell with its earnings beat. Intel and Amazon will report their results later today.
Nomura shares fell more than 7 percent early on Thursday after Japan’s biggest brokerage posted a sharp fall in quarterly net profit after worries about a global banking crisis roiled markets and hit its investment banking business.
Overnight, in a brutal sell-off, First Republic Bank’s FRC.N market value briefly sank as much as 41 percent to about $888 million, under $1 billion for the first time, a far cry from its peak of more than $40 billion in November 2021.
Investors are waiting to see whether it can find buyers for assets and engineer a turnaround after CNBC reported that US government officials are currently unwilling to intervene.
“First Republic is a bank it would seem to soon be no more. As the bank attempts all manner of rescue strategies it continues to slide relentlessly,” said Clifford Bennett, chief economist at ACY Securities.
“It is a case of the incredible shrinking bank. Until, in the end, it likely just simply ceases to exist.”
Overnight, Nasdaq notched a 0.5 percent gain on tech, while the S&P 500 and the Dow were pulled lower by weakness in economically sensitive sectors, hinting at mounting recession jitters.