US stock futures rise after regulators stepped in to limit impact from Silicon Valley bank

U.S. stock futures rose and the dollar fell in Asian trading Monday after regulators stepped in to prop up the banking system and said depositors at collapsed tech-sector lender Silicon Valley Bank would be repaid in full.

The US Federal Reserve on Sunday announced emergency funding measures to ensure “banks are able to meet the needs of all their depositors” after the second largest bank failure in US history.

Futures markets saw the benchmark S&P 500 index open 1.7 percent higher and the Nasdaq 100 rise 1.8 percent.

European futures were also higher, with contracts for the Euro Stoxx 50 gaining 0.4 percent. Futures markets are relatively illiquid and sensitive to changes in news and sentiment.

The dollar fell 0.8 percent against a basket of other currencies during morning trade. The pound rose 0.8 percent to $1.212.

Stocks in Asia were mixed. Japan’s Topix was down 2 percent at midday after falling 1.5 percent in the first 10 minutes of trading.

SoftBank, which is seen as potentially hardest hit by the unfolding crisis among Japanese companies, fell 2.2 percent.

“So far it looks like a normal bad day for Tokyo. Nothing crazy, but clearly low risk appetite and the possibility that things could get worse at any minute,” said a Tokyo-based broker.

US regulators on Friday shut down SVB, a key financial institution for startups, after customers rushed to withdraw $42 billion — a quarter of total deposits — in a single day.

The Fed announced a new lending facility over the weekend as part of an effort by regulators, including Treasury Secretary Janet Yellen, to avoid spilling over into the financial system.

According to industry insiders, the SVB also played an important role in China’s dollar-based startup financing ecosystem, as companies hold money in the bank before bringing it ashore to mainland China.

Hong Kong’s Hang Seng index rose 2 percent and mainland China’s CSI 300 rose 0.9 percent on Monday.

At an annual session of parliament on Sunday, Beijing announced that it would retain the central bank governor and finance minister. China’s credit growth was also higher than expected in February, bolstering hopes of an economic recovery.

Shanghai Pudong Development Bank, which is involved in a joint venture with Silicon Valley Bank’s China unit, lost 1.1 percent.

A major Tokyo-based fund manager said the week had been the perception that the SVB resolution seemed to ease fears of a domino effect.

However, another Tokyo trader said that despite the fact that US futures are now rising, traders remained cautious as investors took profits from the previous five sessions and braced for more news.