Asian shares extend losses as US banking worries persist

In Asia, direct exposure to the risks from the U.S. failures seemed slim, at least so far

Asian shares declined Tuesday, as investors around the world watched to see what’s next following the second-and third-largest bank failures in U.S. history.

In Asia, direct exposure to the risks from the U.S. failures seemed slim, at least so far. Still, fears of contagion persisted, sending regional benchmarks lower across the region.

Japan’s benchmark Nikkei 225 dropped nearly 2.0% to 27,286.87, extending losses from the day before. Australia’s S&P/ASX 200 dipped 1.6% to 6,992.00. South Korea’s Kospi fell 1.9% to 2,365.18. Hong Kong’s Hang Seng fell 1.2% to 19,462.84. The Shanghai Composite declined 0.7% to 3,245.13.

“There is escalating tension in the global financial world; this is despite non-U.S. banks’ exposure to US regional banks being minimal, with the global systems being well capitalized and flush with liquidity,” Stephen Innes, managing partner at SPI Asset Management, said in a report.

“U.S. financial stress could lead banks of all stripes to retrench lending to the real economy and tighten broader financial conditions, amplifying risk to the broader markets.”