Asian stock markets are trading mostly higher on Tuesday, 21 March 2023, on following the broadly positive cues from global markets overnight on hopes that turmoil in the banking sector may be easing after UBS's takeover of Credit Suisse and central bank efforts to bolster confidence in the financial system.
The strength on regional market partly reflected a positive reaction to the latest efforts to address turmoil in the banking sector, including UBS Group's (UBS) state-backed acquisition of Credit Suisse. UBS on Sunday agreed to buy its embattled rival Credit Suisse for 3 billion Swiss francs ($3.2 billion) in a merger engineered by Swiss authorities to avoid more turmoil in the banking group. Following the emergency rescue, the combined bank will have $5 trillion of invested assets, according to UBS.
Also, major central banks moved on Sunday to bolster the flow of cash around the world. The Federal Reserve announced it has joined with other central banks around to world to take coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.
Investors are also focused on the Fed's decision when policymakers conclude a two-day meeting on Wednesday, with CME Group's FedWatch Tool currently indicating a 26.9% chance interest rates will remain unchanged and a 73.1% chance of a 25-basis point rate hike.
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