European stocks head for higher open but SVB’s collapse rattles global market confidence

Holly Ellyatt

European markets are heading for a higher open Tuesday even as the aftershocks from Silicon Valley Bank’s collapse continue to ripple through financial markets.

Asia-Pacific markets tumbled on Tuesday in a volatile session, after sharp losses seen overnight on Wall Street Monday as investors grappled with the fallout of failed banks in the United States. The Dow Jones Industrial Average notched a fifth day of losses after a plan to backstop depositors in SVB failed to buoy bank stocks.

U.S. stock futures rose on Monday night, however, and traders globally will be looking ahead to the latest U.S. inflation report due Tuesday.

The U.S. consumer price index for February is expected to come in at 0.4% on a monthly basis or at a 6% annual pace, according to Dow Jones estimates. That’s just slightly lower than January’s inflation data of 0.5% and 6% respectively.

Oil prices fall as concerns over SVB fallout spreads

Oil prices dipped as the collapse of Silicon Valley Bank continues to reverberate across global markets.

Brent crude futures last traded lower 0.49% to $80.32 a barrel, while the U.S. West Texas Intermediate futures lost 0.6% to stand at $74.35 a barrel.

National Australia Bank expects the prices to drop further following a stronger than expected U.S. inflation data slated for release later.

“Oil prices fall on market fall-out from the US Silicon Valley Bank collapse. A stronger than expected US CPI data report tonight will put further downward pressure to near term prices,” NAB wrote in a daily note.

While energy prices have seen some relief due to diminishing shortage concerns, upside risks remain said Commonwealth Bank of Australia.

“We see upside risks to our outlook driven by a sustained fall in Russia’s oil and diesel exports,” CBA said.

—Lee Ying Shan

Asia-Pacific banks continue to see losses on SVB fallout

Asia-Pacific banks continued to see sharp falls in Tuesday morning trade.

Japan’s Softbank’s saw a decline of more than 3% in Tokyo’s first hour of trade as investors continued to weigh concerns over the Japanese investment powerhouse.

Banks also saw sharp losses, with Mitsubishi Ufj Financial Group down 6.92%, SMFG falling more than 7% and Mizuho Financial lower at 7.34% and Nomura falling 4.6%.

Australian banks also saw steep declines. Macquarie Group fell 3.6%, National Australia Bank dropped 2.94%, Westpac Banking Corp fell 2.12% and Commonwealth Bank of Australia was down 1.73%.

South Korea’s Shinhan Financial Group fell 1.53%, Woori Financial Group was lower at 2.4%, KB Financial Group fell 2.98% and Industrial Bank of Korea dropped 1.9%.

— Jihye Lee

U.S. inflation to come in cooler in February, Dow Jones estimates

The U.S. consumer price index for February is expected to come in at 0.4% on a monthly basis or at a 6% annual pace, according to Dow Jones estimates.

This is just slightly lower than January’s inflation data of 0.5% and 6% respectively.

CPI will be the next data point that could provide insight on the Federal Reserve’s move ahead of its meeting on March 21 and 22.

A hot inflation report will raise expectations the Fed could hike rates by 50 basis points, up from the 25 points it implemented in February.

—Lim Hui Jie, Patti Dorm

CNBC Pro: SVB crisis reveals how tough higher rates can be — but these 3 stocks are resilient, strategist says

Many firms will find a higher-interest-rate environment very difficult to operate in, as demonstrated by the Silicon Valley Bank crisis, said Anthony Doyle, head of investment strategy at Firetrail Investments.

“There will be winners and there will be losers and part of the challenge for investors today is identifying which are those companies that will find this environment much more difficult than they have done in a zero interest rate world,” he said.

Still, he identified three stocks that he thinks look resilient in this new market environment.

— Weizhen Tan

CNBC Pro: As tech gets hammered, strategists say these stocks present a buying opportunity

The collapse of Silicon Valley Bank has added to the woes of the tech sector, coming hot on the heels of expectations that interest rates are likely to remain high for some time.

But some strategists are doubling down on the sector.

“We think that for medium- and long-term investors, the recent bout of volatility that you’ve seen represents a buying opportunity,” Anthony Doyle, head of investment strategy at Firetrail Investments, told CNBC on Monday.

— Zavier Ong

SVB collapse: No other lender ‘stepping in to fill those shoes,’ investment firm says

Startups will soon feel the secondary effects of Silicon Valley Bank’s collapse in a “very important way,” said Matt Higgins, CEO and co-founder of private investment firm RSE Ventures.

Speaking to CNBC’s “Street Signs Asia,” Higgins explained that SVB was “very paternalistic” to the sector, providing not only payroll services and loans to founders, but more importantly, lines of credit as well.

“A lot of these companies were having trouble already raising equity. And they were counting on those lines to extend their runway to push out [their] cash burn beyond the recession we all expect,” Higgins said.

However, with the shuttering of SVB, “that evaporated overnight, and there’s not another lender that’s going to be stepping in to fill those shoes.” he says.

— Lim Hui Jie

European markets: Here are the opening calls

European markets are heading for a higher open Tuesday even as the aftershocks from Silicon Valley Bank’s collapse continue to ripple through financial markets.

The U.K.’s FTSE 100 index is expected to open 13 points higher at 7,566, Germany’s DAX 36 points higher at 15,024, France’s CAC up 22 points at 7,036 and Italy’s FTSE MIB up 52 points at 26,280, according to data from IG.

Earnings from VW, Circle and Porsche are expected, as are U.K. unemployment figures for January.

— Holly Ellyatt

Source : cnbc