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Asian Markets React to Silicon Valley Bank’s Bankruptcy and Fed Interest Rate Hike Expectations

Investors are growing increasingly concerned over the potential impact of Silicon Valley Bank’s (SVB) bankruptcy on the US financial system. SVB, which provides loans to tech startups, has been facing financial difficulties, raising fears that its failure could create widespread risks in the financial sector.

This concern is compounded by expectations that the Federal Reserve (Fed) will raise interest rates at a slower pace, leaving banks vulnerable to market fluctuations.

The impact of SVB’s troubles is already being felt in Asian markets. Tokyo’s Nikkei closed 1.11% lower at 27,832.96 points, led by financial stocks. Meanwhile, in Australia, the S&P/ASX 200 closed down 0.50% at 7,108.80, and the All Ordinaries closed down 0.51% at 7,311.00.

South Korea’s composite index, which had fallen for the previous three sessions, ended up 0.67% at 2,410.6 points, while the won strongly appreciated against the US dollar. The Chinese stock market, represented by the Shanghai Composite, ended up 1.20% at 3,268.70 points after President Xi Jinping’s government unveiled its new economic management team.

Despite the market turbulence, Hong Kong’s Hang Seng closed higher at 19,695.97 points, up 1.95%. In Thailand, the SET closed down 1.66% at 1,573.07 points.

Investors will continue to monitor the situation with SVB closely as concerns about its bankruptcy and the potential ripple effects on the financial system persist.

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