Asia Pacific markets edge lower after UBS rescue of Credit Suisse

Hong Kong, March 20

Asia Pacific markets edged slightly lower on Monday as investors reacted to news of a Credit Suisse bailout by its bigger rival UBS.

In Hong Kong, the Hang Seng Index tumbled 1.5 per cent at its opening, CNN reported.

Japan's benchmark Nikkei index fell 0.7 per cent, while South Korea's Kospi was flat in morning trade.

The S&P/ASX 200 in Australia slipped 0.8 per cent.

On Sunday, Switzerland's biggest bank, UBS, agreed to buy Credit Suisse in an emergency rescue deal aimed at stemming financial market panic unleashed by the failure of two American banks earlier this month, CNN reported.

The Swiss National Bank said in a statement that the rescue would "secure financial stability and protect the Swiss economy".

On Monday, Hong Kong's de facto central bank and securities regulator joined the chorus of central banks in welcoming the announcement from Zurich and sought to reassure the public that business would continue as usual.

UBS is paying 3 billion Swiss francs ($3.25 billion) for Credit Suisse, about 60 per cent less than the amount the bank was worth when markets closed on Friday, CNN reported.

US stock futures rose on Sunday night following the news.

Dow futures and S&P futures each rose 0.6 per cent, while Nasdaq futures ticked up 0.4 per cent.

That followed another day of losses on Wall Street on Friday, as investors continued to fret over the health of the global banking sector.

The Dow fell 1.2 per cent, and the S&P 500 shed 1.1 per cent, while the Nasdaq Composite dipped 0.7 per cent, CNN reported.