Japan’s Nikkei saw its biggest boost in two months while the Hang Seng was also lifted by a Wall St rally as banking confidence returned

But investors across the region remained on edge with all eyes on the US Federal Reserve’s next move on interest rates

Investors shied away from risky assets on Monday as the threat of a banking crisis in Europe weighed heavy on sentiment

More positive signs of an economic bounceback in China also boosted sentiment on trading floors after a turbulent four days

The shockwave from the Swiss lender’s struggles was felt across the region’s trading floors with investors turning to bonds, gold and dollars

A retail sales recovery in China also boosted sentiment as investors recovered their composure after the Silicon Valley Bank collapse

Tokyo banking shares plummeted their most since the beginning of the Covid-19 pandemic while Hong Kong’s Hang Seng finance subindex dropped too

Investors were hit with mixed messages on Monday as a banking crisis threatened to spread while China’s economy showed signs of bouncing back

The Nikkei and Hang Seng were on the back foot on Friday with traders worried a too hawkish Fed is bringing stress to the US banking sector

A hawkish US Fed chairman’s downbeat predictions on inflation dampened the mood on trading floors though the Nikkei rallied on stimulus hopes

China’s imports and exports slowed in the first two months of this year, denting hopes of a recovery in the world’s manufacturing hub

Japan’s Nikkei was boosted by calming noises coming from the US Fed on rate hikes while Beijing’s safe growth target disappointed investors