Australia

Australian shares are positioned to gain today after most US indices advanced Monday. Following First Citizens' purchase of Silicon Valley Bank, stocks of US regional banks rose.

ASX futures were up 29 points or 0.4% as of 7:00am on Tuesday, indicating a higher open.

US indices closed mixed Monday, after First Citizens agreed to buy much of Silicon Valley Bank and with the health of the banking sector still high on investors' agenda.

The Dow Jones Industrial Average climbed 0.6% while the S&P 500 rose 0.2%. The technology-heavy Nasdaq Composite slipped 0.5%.

First Citizens' deal to buy large parts of Silicon Valley Bank lifted shares of US regional banks, a group that has come under intensifying pressure following SVB's collapse more than two weeks ago.

Stocks ended a volatile stretch last week with all three major indices notching weekly gains. Still, investors remain skittish about risky assets as they weigh central banks' fight to tame inflation against instability in the financial system. For March, the S&P 500 and Nasdaq are on course to post modest gains, while the Dow is down less than 1%.

In commodity markets, Brent crude oil leapt 4.0% to $US77.96 a barrel while gold lost 1.1% to US$1,957.17.

Australian government bonds edged lower, with the 2 Year yield down to 2.82% and the 10 Year dipping to 3.19%. US Treasury notes also declined, with the 2 Year yield falling to 4.00% and the 10 Year slipping to 3.52%.

The Australian dollar was unchanged at 66.45 US cents, after previously closing at 66.44. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, edged lower to 96.39.

Asia

Chinese shares ended mixed as some doubts about the sustainability of the country's economic recovery creeped in following the reopening rally. Focus will be on this week's PMI releases, the first dataset for March, with investor views still split on how strong the rebound will be, Goldman Sachs analysts said in a note. Telecom shares weighed on the market, with China Telecom dropping 4.2% and China Mobile falling 3.2%. Software companies led the gains, supported by growing interest in chatbots. 360 Security Technology added 7.2% and Cloudwalk Technology rose 12%. The benchmark Shanghai Composite Index shed 0.4% to close at 3251.40. The Shenzhen Composite Index gained 0.1% and the ChiNext Price Index added 1.2%.

The Hang Seng Index of Hong Kong closed 1.75% lower at 19567.69, dragged by Chinese tech companies after weak earnings. The Hang Seng Tech Index declined 2.8%. Meituan shed 6.0% after posting a net loss for 2022, while Xiaomi fell 3.9% after weaker Q4 revenue. Alibaba Group edged 0.1% lower after founder Jack Ma returned to mainland China after a year away, signaling a reconciliation between Beijing and the Chinese private sector. Meanwhile, CSPC Pharmaceutical Group rose 0.7% and Wuxi Biologics added 0.3%.

Japanese stocks ended higher, led by gains in railway and real estate shares. Recent turbulence in the global banking sector has lessened prospects of policy tightening by central banks. Central Japan Railway gained 2.9% and Mitsui Fudosan advanced 1.6%. The Nikkei Stock Average rose 0.3% to 27476.87. Investors remained focused on any signs of weakness in the banking industry.

India's Sensex index rose 0.2% to close at 57653.86 as banking sector concerns ebbed. First Citizens Bancshares, one of the U.S.'s biggest regional lenders, agreed to buy large parts of failed Silicon Valley Bank. Gains on the benchmark index were led by a mixed bag of companies, with Reliance Industries rising 1.5%, Sun Pharmaceutical Industries adding 1.15% and Maruti Suzuki India 1.0% higher. Meanwhile, Power Grid Corp. of India and Tata Motors each fell 1.1% and Bajaj Finance was 1.0% lower.

Europe

European stocks rose as banking concerns receded somewhat, though analysts said there could still be economic turbulence ahead. The pan-European Stoxx Europe 600 and Germany’s DAX both gained 1.1% while the French CAC 40 and the FTSE 100 closed 0.9% higher. Banks and automotive stocks were among Europe’s biggest winners.

"Stocks have begun the final week of Q1 on a more positive note. The lack of any more headlines about Deutsche Bank has been a big relief for investors, though nervousness still persists," IG analyst Chris Beauchamp wrote, adding that "a recession is still the broad expectation for the end of 2023 following the recent turmoil."

North America

US indices closed mixed Monday, after First Citizens agreed to buy much of Silicon Valley Bank and with the health of the banking sector still high on investors' agenda.

The Dow Jones Industrial Average climbed 0.6% while the S&P 500 rose 0.2%. The technology-heavy Nasdaq Composite slipped 0.5%.

First Citizens' deal to buy large parts of Silicon Valley Bank lifted shares of US regional banks, a group that has come under intensifying pressure following SVB's collapse more than two weeks ago.

First Citizens' stock surged 22.2%, while shares of First Republic climbed 11.8%. Other regional lenders advanced as well, with PacWest up 3.5% and Western Alliance up 3.0%.

"It's a bit of a relief rally after the selloff on Friday. It's also the last week of the quarter, so I don't think we're going to see the same levels of volatility," said Michael Hewson, chief market analyst at CMC Markets.

While there are still concerns about the banking sector, there were no negative headlines over the weekend for the first time in several weeks, he added.

Stocks ended a volatile stretch last week with all three major indices notching weekly gains. Still, investors remain skittish about risky assets as they weigh central banks' fight to tame inflation against instability in the financial system. For March, the S&P 500 and Nasdaq are on course to post modest gains, while the Dow is down less than 1%.

While concerns about the banking crisis have eased, the ripple effects from the financial system strains could lead banks to keep a tighter leash on lending to households and businesses. The impact of a tighter credit cycle and higher interest rates on consumers could bring the economy another step closer to a recession, according to Saira Malik, chief investment officer at Nuveen.

"I do think we will experience a mild recession either later this year or early next year," Ms. Malik said. She has advised clients to focus on higher-quality assets, including companies with the ability to continue to grow their dividends and emerging market equities.

On the economic front, investors are looking ahead to this week's US and eurozone inflation data for more clues on the path of monetary policy. On Friday, the Commerce Department is set to release figures on US household spending and income in February, a key inflation reading that is closely watched by the Federal Reserve.