Shares rise, dollar weakens on bank sector fears

Asian stocks rose, the dollar eased and gold hovered around its record highs on Friday, as jittery investors remained nervous about the U.S. banking sector following another rout in shares of regional lenders.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was 0.44% higher and was on course to snap its two-week losing streak. Japan remains shut for holiday, while Australia’s S&P/ASX 200 index (.AXJO) fell 0.06%.

Wall Street ended lower on Thursday after Los Angeles-based PacWest Bancorp’s (PACW.O) move to explore strategic options deepened fears about the health of U.S. lenders as pressure grows on regulators to take more steps to shore up the country’s banking sector.

Shares of U.S. regional banks sank this week in the wake of the collapse of First Republic Bank over the weekend that has brought back fears of a financial sector crisis.

“With the dust barely settling post Wednesday’s Fed meeting, banking sector developments have added to conviction not just that the Fed is done tightening, but that the Fed will be cutting rates before the end of the year and more aggressively than previously priced for,” said Ray Attrill, head of FX strategy at National Australia Bank.

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