HONG KONG: Asian stocks were off to a shaky start on Wednesday following plunges on Wall Street fuelled by concerns for the banking sector and broader fears of recession.

Lacklustre US consumer data and mixed earnings reports fed those fears during trading hours, with US stocks in the red the entire day.

But US equities futures, particularly on the tech-heavy Nasdaq, were trading well into the green on Wednesday morning after promising earnings reports from Microsoft and Google parent Alphabet were filed after markets closed.

Stephen Innes, of SPI Asset Management, said in a note that “earnings were not universally bad and, in some cases, even good”, but he pointed to struggling shipping firms as a particular cause for concern.

In a downcast report, UPS had warned investors its full-year results would be on the “low end” due to “challenging macro conditions and changes in consumer behavior”.

Such a downturn in freight, Innes said, “is typically a precursor to a broader slowdown in economic activity”.

Tokyo, Shanghai, Sydney, Taipei, Wellington, Manila, Singapore and Kuala Lumpur were all down in early trade on Wednesday.

Jakarta and Hong Kong were up, while Seoul was dipping in and out of negative territory.

After a selloff in Hong Kong-listed Chinese firms on Tuesday dragged the Hang Seng down almost two percent, the Hang Seng China Enterprises Index appeared to have stabilised Wednesday, though it was still well below where it was at the start of the previous day.

Regional US banks were also top of mind for traders after First Republic disclosed it lost more than $100 billion in deposits in the first quarter, intensifying concerns about its long-term prospects after the failures of other mid-sized banks.

Shares of First Republic plunged 49 percent, pressuring other regional banks that have been seen as vulnerable.

Meanwhile, the Conference Board reported a bigger than expected drop in consumer confidence in April, with Oanda senior market analyst Edward Moya saying in a note that consumers’ “expectations signal a recession is looming”.

Also weighing on traders is the question of what all of this means for interest rates, with the US Federal Reserve mulling further hikes as it seeks to fight inflation.

The overall outlook, Moya said, suggests “the Fed can stay on their tightening course with the risks of a June hike still remaining on the table”.