People walk in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Monday, March 20, 2023, in Tokyo. Asian stock markets fell Monday after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.(AP Photo/Eugene Hoshiko)
A person walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Monday, March 20, 2023, in Tokyo. Asian stock markets fell Monday after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.(AP Photo/Eugene Hoshiko)
A person walks near an electronic stock board showing Japan's Nikkei 225 index at a securities firm Monday, March 20, 2023, in Tokyo. Asian stock markets fell Monday after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.(AP Photo/Eugene Hoshiko)
A person walks in front of an electronic stock board showing Japan's Nikkei 225 and New York Dow indexes at a securities firm Monday, March 20, 2023, in Tokyo. Asian stock markets fell Monday after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.(AP Photo/Eugene Hoshiko)
People walk in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Monday, March 20, 2023, in Tokyo. Asian stock markets fell Monday after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes. (AP Photo/Eugene Hoshiko)
Colm Kelleher, Chairman UBS, right, and Axel Lehmann, Chairman Credit Suisse, attend a press conference in Bern, Switzerland, Sunday March 19, 2023. Banking giant UBS is acquiring its smaller rival Credit Suisse in an effort to avoid further market-shaking turmoil in global banking, Swiss President Alain Berset announced on Sunday. Sunday’s news conference by the Federal Council, the seven-member governing body that includes Berset, follows the collapse of two large U.S. banks last week that spurred a frantic, broad response from the U.S. government to prevent any further bank panics. (Peter Klaunzer/Keystone via AP)
Traders work on the floor at the New York Stock Exchange in New York, Tuesday, Oct. 4, 2022. (AP Photo/Seth Wenig, File)
A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, March 21, 2023. sian stock markets followed Wall Street higher on Tuesday ahead of a Federal Reserve decision on another possible interest rate hike amid worries about global banks. (AP Photo/Ahn Young-joon)
A currency trader passes by the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, March 21, 2023. sian stock markets followed Wall Street higher on Tuesday ahead of a Federal Reserve decision on another possible interest rate hike amid worries about global banks. (AP Photo/Ahn Young-joon)
A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Tuesday, March 21, 2023. sian stock markets followed Wall Street higher on Tuesday ahead of a Federal Reserve decision on another possible interest rate hike amid worries about global banks. (AP Photo/Ahn Young-joon)BEIJING (AP) — Asian stock markets followed Wall Street higher on Tuesday ahead of a Federal Reserve decision on another possible interest rate hike amid worries about global banks.
Shanghai, Hong Kong and Seoul advanced. Japanese markets were closed for a holiday. Oil prices declined.
Wall Street's benchmark S&P 500 index rose 0.9% on Monday after U.S., European and Japanese central banks announced measures to ease strains on the financial system, including lending more dollars if necessary.
The collapse of two U.S. banks and the takeover of troubled Credit Suisse have heightened fears other lenders might crack under the strain of repeated rate hikes to cool economic activity and inflation that is near multi-decade highs.
Traders expect the Fed to go ahead with another rate hike Wednesday but think it might be held to 0.25 percentage points, down from the 0.5 points previously expected.
“Can the Federal Reserve really continue to hike rates in the face of a banking crisis?" Clifford Bennett of ACY Securities said in a report. “There are ongoing stresses in the banking system that will only grow with further rate hikes.”
The Shanghai Composite Index gained 0.2% to 3,240.61 and the Hang Seng in Hong Kong advanced 0.4% to 19,075.79.
The Kospi in Seoul rose 0.4% to 2,389.19 and Sydney's S&P-ASX 200 surged 1.2% to 6,979.00.
New Zealand declined while Southeast Asian markets rose.
On Wall Street, the S&P 500 rose to 3,951.57. The Dow Jones Industrial Average gained 1.2% to 32,244.58. The Nasdaq composite added 0.4% to 11,675.54.
Swiss regulators arranged Sunday for UBS to acquire rival Credit Suisse for almost $3.25 billion.
Credit Suisse has been battling a unique set of problems for years, but they came to a head last week as its stock price tumbled to a record low.
Attention in the United States has focused on smaller and mid-sized banks.
The surge in the Fed's benchmark lending rate to a range of 4.5% to 4.75%, up from close to zero at the start of last year, caused prices of bonds and other assets on banks' books to fall, raising concern about their financial health.
First Republic Bank has been at the center of investors’ crosshairs in the hunt for the industry’s next victim. Its shares fell 47.1% after S&P Global Ratings cut its credit rating for the second time in a week.
S&P said it could lower the rating even further despite a group of the biggest U.S. banks announcing last week they would deposit $30 billion in a sign of faith in First Republic.
New York Community Bancorp jumped 31.7% after it agreed to buy much of Signature Bank in a $2.7 billion deal. Signature Bank became the industry’s third-largest failure earlier this month.
In energy markets, benchmark U.S. crude lost 75 cents to $87.07 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 90 cents on Monday to $67.64. Brent crude, the price basis for international oil trading, declined 80 cents to $72.99 per barrel in London. It gained 82 cents the previous session to $73.79.
The dollar fell to 131.21 yen from Monday's 131.32 yen. The euro declined to $1.0717 from $1.0724.
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