ASX futures had dipped 29 points or 0.4% as of 6:00am on Friday, suggesting a negative open.

US stocks fell while government bonds and gold rallied Thursday, reflecting persistent anxieties on Wall Street about regional banks and the economic outlook.

• The S&P 500 slipped 0.7%
• The Dow Jones Industrial Average declined 0.9%
• The Nasdaq Composite lost 0.5%

Nearly two months after Silicon Valley Bank's collapse, worries about potential bank failures continued to grip the market. Investors also assessed the fallout from Wednesday's Federal Reserve meeting.

Shares of three midsize lenders (PacWest Bancorp, Western Alliance Bancorp, and First Horizon) all fell more than 30%, while a broad index of regional banks dropped 3.5% to its lowest level since 2020. Reflecting demand for safer assets, the yield on the benchmark 10-year US Treasury note fell to 3.350% from 3.401% Wednesday. Gold settled near a record high at $2,048.00 a troy ounce.

In commodity markets:

• Brent crude oil edged 0.1% higher to US$72.40 a barrel
• Gold gained 0.5% to US$2,049.81

Australian government bonds moved lower, with the 2 Year yield declining to 3.09% and the 10 Year yield falling to 3.30%. US Treasury notes were mixed, with the 2 Year yield edging down to 3.77% and the 10 Year yield increasing to 3.37%.

The Australian dollar climbed to 66.91 US cents from its previous close of 66.70. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, hinted lower to 95.66.

Asia

Chinese shares gained in the first day of trading after the Labour Day break. The Shanghai Composite Index closed up 0.8%.

Hong Kong shares ended higher, driven by insurers, reversing some of the previous day's losses. The benchmark Hang Seng Index rose 1.3% to 19948.73. Ping An Insurance rose 7.7%, leading gains. China Life Insurance rose 5.2%. Tech companies were also higher, with the Hang Seng Tech Index ending up 0.55%. Consumption stocks retreated, following the weak performance of peers on the mainland stock market. Haidilao International Holding declined 2.2% and Budweiser Brewing dropped 4.3% after releasing first-quarter earnings.

Japanese markets were closed Thursday to celebrate Greenery Day.

India's benchmark Sensex index closed 0.9% higher at 61749.25, bolstered by gains in finance-related stocks. Corporate earnings are likely to remain in focus. Bajaj Finance rose 3.4%, while Housing Development Finance Corp. added 2.6% and HDFC Bank was 2.1% higher. Decliners included Nestle India, which fell 0.8%.

Europe

European stocks fell as investors reacted to further interest rate rises by the Federal Reserve and the European Central Bank. Fresh concerns over the health of US banks also weighed on sentiment. The pan-European Stoxx Europe 600 dropped 0.5%, with bank stocks among the fallers, while Germany’s DAX slipped 0.5% and France’s CAC 40 shed 0.9%. The Fed raised rates by 25 basis points on Wednesday and the ECB delivered the same rise on Thursday.

"The Fed and the ECB might go on merrily hiking rates, but the renewed crisis in US regional banks is the main reason for the firmly 'risk-off' tone to today's session," IG analyst Chris Beauchamp wrote.

In London, the FTSE 100 closed down 1.1%. "Crashes in oil and regional bank stocks are driving the flight to safety across the globe, and unsurprisingly worries about the banking system mean that gold is in high demand once again," explained Beauchamp.

North America

US stocks fell while government bonds and gold rallied Thursday, reflecting persistent anxieties on Wall Street about regional banks and the economic outlook.

• The S&P 500 slipped 0.7%
• The Dow Jones Industrial Average declined 0.9%
• The Nasdaq Composite lost 0.5%

Nearly two months after Silicon Valley Bank's collapse, worries about potential bank failures continued to grip the market. Investors also assessed the fallout from Wednesday's Federal Reserve meeting.

Shares of three midsize lenders (PacWest Bancorp, Western Alliance Bancorp, and First Horizon) all fell more than 30%, while a broad index of regional banks dropped 3.5% to its lowest level since 2020. Reflecting demand for safer assets, the yield on the benchmark 10-year US Treasury note fell to 3.350% from 3.401% Wednesday. Gold settled near a record high at $2,048.00 a troy ounce.

A renewed state of heightened concern about regional banks arose this week after regulators seized First Republic Bank and struck a deal to sell the bulk of its operations to JPMorgan Chase. Declines in regional banks were generally modest on Monday after the deal was first announced but became more acute on Tuesday, sparking broad losses in stocks and gains in government bonds.

Stocks continued to slide Wednesday even after the Fed hinted that it could be done raising short-term interest rates for a while after having lifted them to their highest level in 16 years. Some investors said Fed Chair Jerome Powell might have unsettled the market by still leaving the door open to future rate increases to combat inflation and not expressing greater concern about the banking system.

"With the Fed pushing forward with the rate yesterday, I think they kind of are at risk of pushing things a bit too far," said Tom Garretson, senior portfolio strategist at RBC Wealth Management in the US.

In the regional bank sector, First Horizon shares sank after its $13.4 billion merger with Toronto's TD Bank was called off. Western Alliance finished the day down 38% after it denied a report that it was exploring strategic options, including a potential sale.

Major US companies, meanwhile, continued to report results from the three months ended March 31. Ball Corp. shares posted double-digit gains after the container company reported adjusted earnings that beat expectations. MetLife shares sank after its results missed expectations.

As of Thursday, 80% of companies in the S&P 500 had reported fourth-quarter results with 78% of those companies topping analysts' consensus earnings estimates, according to FactSet. That is slightly above the five-year average of 77%. In aggregate, companies are reporting earnings that are 7.1% above estimates, the biggest margin since the fourth quarter of 2021.