(Updates prices, adds detail)

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Asian stock markets : https://tmsnrt.rs/2zpUAr4

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U.S. authorities act to stabilise banks

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Markets speculate on less aggressive Fed hikes

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Short-term Treasury yields tumble, Fed futures jump

By Wayne Cole

SYDNEY, March 13 (Reuters) - U.S. stock futures rallied in Asian trade on Monday as authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB), while investors wagered a rate hike this month was no longer a certainty.

The dollar slid as Goldman Sachs predicted the U.S. Federal Reserve would no longer lift interest rates next week, capping the biggest rally for short-dated Treasuries since 1987.

The wild sea change in markets came after the Fed and U.S. Treasury announced a range of measures to stabilise the banking system and said depositors at SVB would have access to their deposits on Monday.

The Fed said it would make additional funding available through a new Bank Term Funding Program, which would offer loans up to one year to depository institutions, backed by Treasuries and other assets these institutions hold.

The moves came as authorities took possession of New York-based Signature Bank, the second bank failure in a matter of days.

Analysts noted that, importantly, the Fed would accept collateral at par rather than marking to market, allowing banks to borrow funds without having to sell assets at a loss.

"These are strong moves," said Paul Ashworth, head of North American economics at Capital Economics.

"Rationally, this should be enough to stop any contagion from spreading and taking down more banks, which can happen in the blink of an eye in the digital age," he added. "But contagion has always been more about irrational fear, so we would stress that there is no guarantee this will work."

Investors reacted by sending U.S. S&P 500 stock futures up 1.8%, while Nasdaq futures rose 1.9%. EUROSTOXX 50 futures firmed 0.4%, and FTSE futures 0.1%.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.3%, helped by gains in China.

Chinese blue chips added 0.8% after Beijing surprised by keeping the head of the central bank and finance minister in their posts on Sunday, prioritising continuity as economic challenges loom at home and abroad.

Japan's Nikkei fell 1.6% in choppy trade, while South Korea rose 0.3%.

A NEW HEADACHE FOR THE FED

Such was the concern about financial stability, that investors speculated the Fed would now be reluctant to rock the boat by lifting interest rates by a super-sized 50 basis points next week - and might not even hike at all.