US markets mixed after First Republic Bank takeover

Wall Street stocks were mixed on Monday as markets digested the takeover of the embattled First Republic Bank, while Tokyo stocks closed higher ahead of the Federal Reserve's key policy decision this week.

US financial authorities announced the seizure of First Republic on Monday and that it had been sold to JPMorgan Chase, making it the second biggest bank by assets to collapse in US history.

The regional lender's stock-price had nosedived last week after it disclosed it lost more than $100 billion in deposits during the first quarter.

US stocks were mixed close to midday, with the Dow Jones Industrial Average rising 0.2 percent but the tech-rich Nasdaq Composite Index slipping by a similar magnitude.

The broad-based S&P 500 ticked up 0.1 percent.

"The collapse of First Republic saw JPMorgan step up to the plate and squash the biggest market risk on the table," said Edward Moya of the OANDA trading platform in a note.

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"It is looking like the stress for the smaller banks is over as we now have a playbook to help the next bank that runs into trouble," he added.

The takeover of First Republic came after the collapse of three midsized lenders in March including the high-profile failures of Silicon Valley Bank (SVB) and Signature Bank -- which rattled markets and raised contagion worries.

But Jack Ablin, chief investment officer at Cresset, added that the latest deal would go "a long way to calm investors' concerns" on turmoil in the sector.

Central bank focus

Looking ahead, investors are closely eyeing the US Fed's next interest rate decision this week along with key data such as employment numbers.

Among other issues, SVB's failure had come after it took on too much interest rate risk.

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The US central bank is widely expected to raise its benchmark lending rate for a tenth and possibly final time, this time by another quarter-point.

For now, the market appears "primed" for the outcome of a rate hike and pause signal, according to Patrick O'Hare of Briefing.com.

In Asia, the benchmark Nikkei 225 index rose 0.9 percent while the broader Topix index ended one percent higher.

"Investors are more open to risk-taking after the Bank of Japan policy decision (on Friday), which was seen as more dovish than expected, and after rallies in European and US markets," IwaiCosmo Securities said.

Most markets across Asia and Europe are closed on Monday for public holidays.

Sydney closed up 0.3 percent while Wellington ended down 0.1 percent.

The euro edged down against the dollar, but was slightly up against the pound.

In Tokyo, SoftBank Group rallied 1.35 percent after it said its UK-based chip designer Arm has submitted "a draft registration statement" to the US Securities and Exchange Commission related to its planned initial public offering.

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Astellas Pharma edged up 2.2 percent after it said it would acquire US-based Iveric Bio for $5.9 billion, while Sony Group lost 1.8 percent.

Key figures around 1545 GMT

London - FTSE 100: Closed for holiday

Frankfurt - DAX 40: Closed for holiday

Paris - CAC 40: Closed for holiday

EURO STOXX 50: Closed for holiday

New York - Dow: UP 0.2 percent at 34,149.86

Hong Kong - Hang Seng Index: Closed for holiday

Shanghai - Composite: Closed for holiday

Tokyo - Nikkei 225: UP 0.9 percent at 29,123.18 (close)

Euro/dollar: DOWN at $1.0971 from $1.1020 on Friday

Pound/dollar: DOWN at $1.2490 from $1.2567

Dollar/yen: UP at 137.33 yen from 136.28 yen

Euro/pound: UP at 87.81 pence from 87.64 pence

Brent North Sea crude: DOWN 1.5 percent at $79.16 per barrel

West Texas Intermediate: DOWN 1.0 percent at $75.39 per barrel

Source: AFP