Shares in Shanghai, Tokyo and Hong Kong declined after Swiss authorities arranged the takeover of troubled Credit Suisse.

Swiss authorities on Sunday announced UBS would acquire its smaller rival as regulators try to ease fears about banks following the collapse of US lenders Silicon Valley Bank and Signature Bank.

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What happened overnight 

Asian stock markets fell overnight after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.

Hong Kong stocks fell 3pc during afternoon trading as HSBC and other lenders tumbled, with traders fretting over the financial sector despite the UBS buyout of troubled Credit Suisse.

The Hang Seng Index slipped 3pc, or 586.66 points, to 18,931.93.

Tokyo shares ended lower, weighed by the concerns about the global banking sector as well as a stronger yen.

The benchmark Nikkei 225 index fell 1.4pc, or 388.12 points, to 26,945.67, while the broader Topix index lost 1.5pc, or 30.12 points, to 1,929.30.

Credit Suisse's banking operations appeared to be running business as usual at its major offices in Asia.

Monetary authorities in Singapore and Hong Kong, where Credit Suisse hosts large regional offices, separately said the Swiss bank's business continued without interruption.