SINGAPORE- Asian shares rose sharply on Wednesday while the dollar was on the defensive as easing concerns over the banking sector revived risk appetite, while Alibaba’s stock soared on the internet behemoth’s plans to split into six units.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.82 percent higher, while Japan’s Nikkei advanced 0.49 percent.
Hong Kong’s Hang Seng index surged over 2 percent, buoyed by Alibaba after the Chinese e-commerce conglomerate announced its break-up plans. Alibaba’s Hong Kong shares shot up 15 percent, while the company’s US-listed shares closed 14.3 percent higher.
The news lifted investor confidence in the wider Chinese tech sector, with shares of Alibaba’s e-commerce rival JD.com Inc 7 percent higher, and gaming giant Tencent Holdings Ltd jumping 5 percent.
China’s CSI 300 benchmark edged up 0.4 percent.
Following weeks of volatility in the market after the unexpected failure of two US banks and the rescue of Credit Suisse in Europe, investor nerves were calmed this week by the sale of assets in collapsed lender Silicon Valley Bank and no new signs of further stresses in the banking system.
“The lack of any substantive developments in the banking backdrop has seen markets relatively calm by the standards of recent weeks,” said Taylor Nugent, an economist at National Australia Bank.
In the first congressional hearing into the collapse of the two US regional lenders, lawmakers pressed the Federal Reserve’s top banking regulator on whether the central bank should have been more aggressive in its oversight of SVB.
Michael Barr, the Fed’s vice chairman for supervision, criticized SVB for going months without a chief risk officer and how it modelled interest rate risk.
“Investors have not completely lost their anxiety … and hints of a big regulatory overhaul are likely to weigh on the sector until details emerge,” said Robert Carnell, regional head of research, Asia Pacific at ING.
