* War triggers sleepless nights for traders and wealth

managers

* Fund managers cut positions amid market volatility,

uncertainty

* Cash becomes favoured asset amid market turmoil

* Corporate credit markets impacted by ongoing conflict

By Ankur Banerjee, Samuel Shen, Rae Wee and Matt Tracy

SINGAPORE/SHANGHAI/NEW YORK, March 27 (Reuters) - For

Wang Yapei, it's all about sleeping well at night. The

Shanghai-based fund manager has cut positions aggressively in

the face of a steep selloff that has torn through global markets

as the war in the Middle East rages on.

"I don't like rollercoaster rides ... the opening was ugly,

so I cut portfolio positions to roughly 30%," said Zijie Private

Fund's Wang, referring to Monday's brutal rout in Chinese

stocks. "Then I felt quite relieved."

Despite a bit of a rebound later in the week, Wang is not

looking to add positions due to wild and unpredictable moves in

all asset classes globally - from stocks to oil to bonds and

gold.

"Today, you seek bottom-fishing and the next day, you suffer

from another selloff," said Wang. "When there's uncertainty, you

reduce your holdings so you can sleep well at night."

Wang is not alone - from Shanghai to New York, traders,

investors, wealth managers and bankers are grappling with

sleepless nights, working weekends, long client meetings, quick

portfolio churns and last-minute nervousness in executing deals.

Those challenges stem primarily from uncertainty about how

long the U.S.-Israeli war with Iran will go on and what it would

mean for oil prices - which are already above $100 a barrel - as

well as inflation, interest rates, and central bank actions.

The war, now about to enter its fifth week, has put gold, a

traditional haven, on course for its biggest monthly decline

since 2008 with a drop of about 16%. Treasury yields are up 46

basis points this month, the sharpest gain since October 2024.

While some market participants are leaning on past

experiences, including Russia's war with Ukraine that erupted in

2022 and the fallout from the COVID-19 pandemic, most are

finding that old playbooks no longer work.

"There are very few risk-off assets," said Rajeev De Mello,

chief investment officer at GAMA Asset Management, who has been

working through the weekends and running longer than usual team

meetings.

"Treasuries are not working, typical risk-off currencies

like the yen and the Swiss franc are not working. Gold and

silver also not helping."

'NO PLACE TO HIDE'

The nearly month-long war triggered by joint U.S.-Israeli

strikes on Iran in late February has resulted in Tehran

effectively shutting the Strait of Hormuz, a passageway for a

fifth of the world's oil and liquefied natural gas flows.

That has raised the spectre of stagflation - high inflation

with weak growth - and resulted in investors selling almost

everything except the U.S. dollar.

"Since the war broke out, we've reduced equities because

there's no place to hide," said Singapore-based De Mello.

Stocks in Asia have been particularly hard hit; South Korean

equities are down about 13% this month while Japan's

Nikkei is about 9% lower. In contrast, U.S. stocks have fared

better with a 6% decline.

That slightly better performance from U.S. stocks has lured

some investors.

Kenyon Tse, head of sales trading at UBS in Hong Kong, on

Tuesday said every day since the beginning of March, his firm's

trading desk had seen net selling in TSMC, the biggest

Asian firm by market capitalisation and many global investors'

biggest exposure to Taiwan.

London-based Matthias Scheiber at Allspring Global

Investments trimmed his emerging market positions and tactically

added to U.S. exposure, but he warned that pressure could

intensify if global central banks follow Australia's lead in

raising rates.

For those on the wrong side of the market tumult, things

have been particularly daunting. A trader at an energy company

said the outbreak of the war led to sleepless nights, as their

firm had held some positions that bet on falling oil prices.

"I literally couldn't sleep that weekend when it began," the

trader said, adding that the following week was highly stressful

amid sharp volatility and a surge in internal meetings. The

trader spoke on condition of anonymity as they are not

authorised to speak to the media.

For Kenneth Goh, director of private wealth management at

UOB Kay Hian, the war has meant near-sleepless nights, not from

wagers gone wrong, but from managing clients' portfolios through

an unprecedented shock.

"It's been non-stop," Goh said. "If I'm lucky, I sleep at

midnight. If not, I sleep at 2, 3 or 4 a.m. But that's the life

I chose."

TUMULT HITS CORPORATE CREDIT TOO

Ongoing uncertainty around the Middle East conflict has also

impacted new deals in corporate credit markets.

In New York, banks backing roughly $18 billion in debt for

the $55 billion takeover of video game developer Electronic Arts ( EA )

closely watched developments around U.S. President Donald

Trump's Monday deadline for strikes on Iran's electricity grid.

That deadline coincided with the EA debt's late-stage

marketing to investors early in the week and could have led to

less borrower-friendly terms, according to two bankers familiar

with the matter.

Bankers on the deal over the weekend were preparing for the

possibility of strikes on Iranian infrastructure and potentially

higher pricing for the EA debt that would likely follow, the two

bankers said.

Both the bankers declined to be named as they were not

authorised to speak to the media. EA did not immediately return

a request for comment.

After Trump on Monday announced a five-day postponement of

the strikes, the banks were able to reduce borrowing costs on

the debt's roughly $6.6 billion cross-currency, high-yield bond

portion, said the bankers.

On Thursday, Trump said he would pause threatened attacks on

Iranian energy plants for 10 days until April 6.

The relentless volatility has meant investors just can't

take their eyes off screens.

"You continuously need to watch, monitor and be a

participant in the market and this obviously takes a toll in

terms of your mental ability," said Mukesh Dave, chief

investment officer at Aravali Asset Management.

Singapore-based Dave said he experienced similar intensity

in 2008 and during the Asian financial crisis of the late 1990s,

but stopped short of saying if this rivals those moments - for

now.

"If this lasts for another week or so, then we'll see," he

said. "You can't afford to make mistakes, there is zero

tolerance for mistakes."