Mixed Asia after the sinking of Wall St 102.3 KRMG

BEIJING — (AP) Asian stock markets were mixed on Friday after Wall Street sank on concerns about the health of U.S. banks coming under pressure from interest rate hikes.

Shanghai fell while Hong Kong and Sydney advanced. Markets in Japan and South Korea were closed for the holidays. Oil prices rose.

Wall Street’s benchmark S&P 500 index lost 0.7% on Thursday as investors worried about the health of banks after three high-profile bankruptcies in the United States and one in Switzerland.

Shares of PacWest Bancorp, an investor watch target, fell 50.6%. The bank said it was considering options and had been approached by potential partners and investors.

Investors are watching what steps authorities might take to limit further contagion risks, IG’s Yeap Jun Rong said in a report. Any inaction over the weekend could translate into a more pessimistic risk environment to start next week.

The Shanghai Composite Index lost 0.7% to 3,326.18 while the Hang Seng in Hong Kong gained 0.6% to 20,063.58.

Sydney’s S&P-ASX 200 rose 0.3% to 7,213.90. Markets in New Zealand and Southeast Asia declined.

On Wall Street, the S&P 500 fell to 4,061.22. The Dow Jones Industrial Average fell 0.9% to 33,127.74, putting it in negative territory for the year. The Nasdaq composite fell 0.5% to 11,966.40.

Rate hikes by the Federal Reserve and other central banks in Europe and Asia have put pressure on banks by causing market prices of bonds on their books to fall. Investors fear that depositors will withdraw money from struggling lenders, adding to their financial pressures.

Shares of Western Alliance Bancorp plunged as much as 61% after the Financial Times said the Phoenix-based bank was considering selling its business. The company denied the report. Its stock ended the day down 38.5%.

This week, regulators seized First Republic Bank and sold most of it to JPMorgan Chase.

Officials stressed they saw the banking system was sound and safe, but concerns were not leaving the market.

Wednesday, the Federal Reserve announced another hike that took its overnight rate to a range of 5% to 5.25% from near zero at the start of last year.

Traders expect at least a brief US recession this year. They expect the Fed to start cutting rates in the second half of the year to support economic growth, although Chairman Jerome Powell said this week he does not expect cuts any time soon.

Investors fear that even without more bank failures, turmoil in the sector could lead smaller institutions to cut lending. This could push up borrowing costs, putting downward pressure on economic growth.

A report on Thursday showed that the number of American workers filing for unemployment last week accelerated slightly more than expected. A resilient labor market is one of the main pillars of the economic downturn.

A more comprehensive government job report is due out on Friday.

The Fed signaled Wednesday that it may end rate hikes for now, but European Central Bank President Christine Lagarde said Thursday that we are not stopping. The ECB announced another rate hike, but with a narrower margin of a quarter of a percentage point.

Helping to support stocks despite all the worries was a significantly better than expected earnings season.

S&P 500 companies are still on track for a second consecutive quarter of declining earnings, but results have mostly been better than expected.

In energy markets, benchmark U.S. crude rose 43 cents to $68.99 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 4 cents on Thursday to $68.56. Brent crude, the price basis for international oil trade, added 47 cents to $72.97 a barrel in London. It advanced 17 cents the previous session to $72.50.

The dollar fell to 134.01 yen from 134.14 yen on Thursday. The euro gained $1.1042 from $1.1016.

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