LONDON – Global stock markets rose on Tuesday as investors shook off worries about a hedge fund default that hit international banking stocks overnight and remained focused on the global COVID-19 vaccination programme.

Wall Street’s main indexes opened lower on Tuesday as a rise in US bond yields hit heavyweight tech-related stocks, while undervalued banks and industrial stocks that stand to benefit from a re-opening economy edged higher.

The Dow Jones Industrial Average fell 43.5 points, or 0.13 percent, at the open to 33127.88. The S&P 500 fell 7.7 points, or 0.20 percent, at the open to 3963.34, while the Nasdaq Composite dropped 50.8 points, or 0.39 percent, to 13008.804 at the opening bell.

European stocks opened higher with the regional STOXX 600 index up 0.5 percent. Britain’s FTSE 100 rose 0.6 percent, Germany’s DAX and Italy’s FTSE MIB rose 0.5 percent each, and France’s CAC 40 rose 1 percent.

MSCI’s All Country World Index, which tracks stocks across 49 countries, traded flat.

S&P 500 stock futures were off 0.1 percent.

Sentiment in Asia was mixed early, then turned positive, with most of the region’s major markets trading higher.

Nomura and Credit Suisse are facing billions of dollars in losses and regulatory scrutiny after a US investment firm, named by sources as Archegos Capital, defaulted on equity derivative bets, putting investors on edge about who else might be exposed.

Nomura shares were down a further 1.1 percent Tuesday after dropping as much as 16 percent on Monday, when it revealed it could take a US$2 billion loss from the hedge fund fallout.

“From a market perspective with contagion looking limited … despite the news flow of further forced liquidations and prime brokerage losses, this looks at this stage to be a positioning- driven sell-off in US futures and various single stock names,” said Eleanor Creagh, market strategist at Saxo Bank.

Creagh added that further forced deleveraging was still a risk if prime brokers tighten margin requirements.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.6 percent higher.

Hong Kong’s Hang Seng Index gained 1.2 percent to reach 28,668, driven up by a rebound in the city’s tech stock index. Japan’s Nikkei was flat, dragged down by Nomura’s share price weakness. Australia sounded a weaker tone when the S&P/ASX200 closed down 0.9 percent at its lowest point for a week.

Credit Suisse’s Asia Pacific senior investment strategist Jack Siu said the prospect of Asian travel bubbles had sparked enthusiasm among some investors in the region.

“Tourism-dependent Asian economies will benefit,” he said.

Hong Kong’s commerce secretary, Edward Yau, flagged Monday the government had restarted talks with Singapore to re-establish a potential travel bubble between the cities.

Investor sentiment was still closely tied to the pace of the global vaccine rollout, said Citigroup equity derivative solutions director Elizabeth Tian.

“Investors will also be watching the number of COVID-19 cases as rises in Western Europe and the Philippines sees the return of renewed restrictions, while vaccination attempts threaten to stall amidst supply constraints and vaccine nationalism,” Tian said.

“While restrictions are increased in Europe, the UK will be relaxing stay-at-home rules,” she added.

Wall Street on Monday pared early losses driven by the banking sector on fears that issues from the downfall of Archegos could spread throughout the banking sector.

The Dow Jones Industrial Average rose 0.3 percent, the S&P 500 lost 0.09 percent and the Nasdaq Composite dropped 0.6 percent.

Benchmark US 10-year yields hit 1.7760 percent, their highest since January 2020.

In currencies, the dollar rose to its highest in a year against the yen, boosted by the spike in Treasury yields. The euro fell to US$1.1751 against the dollar for the first time since Nov 11. 

Oil prices fell as the Suez Canal opened up after days closed by a grounded supercarrier and focus turned to an OPEC+ meeting this week where the extension of supply curbs may be on the table amid new coronavirus pandemic lockdowns.