Saturday, April 1, 2023

Stock market in ‘bloodshed’ due to bank apprehension – Usky News

LONDON: Renewed fears of a looming banking crisis dragged down stock markets on Wednesday, breaking a day’s rally as Credit Suisse led the slide in the major lender’s shares.
The collapse of tech sector lenders Silicon Valley Bank and Signature has roiled global markets, forcing US authorities to intervene over the weekend to stem the contagion.
After Tuesday’s rebound, equities fell again on Wednesday, with European indices falling more than three percent in the afternoon and Wall Street opening lower.
The euro declined for the first time since December 2021, while oil prices also declined, with the main US contract WTI slipping below $70 a barrel.
“You get the picture: Investors were panicking. Bloodshed, if you will,” said Fawad RazakzadaMarket Analyst at CityIndex and
“Anxieties have intensified over another 2008-style financial crisis,” he said.
Shares of Credit Suisse, Switzerland’s second largest bank, fell 30 per cent to a record low.
Credit Suisse, already mired in scandals before the US banking turmoil, was hammered by markets after its main shareholder, the Saudi National Bank, refused to infuse more cash into the bank.
SVB and Signature were the biggest banking crashes since the 2008 global financial crisis, forcing US authorities to take them over and guarantee customer deposits.
“The financial sector in Europe is undergoing significant upheaval today as a result of the collapse of SVB,” noted Naeem AslamChief Investment Officer at Zae Capital Markets.
Bank shares tumbled across Europe, with Germany’s Commerzbank and France’s Societe Generale and BNP Paribas each down more than 10 percent. British lender Barclays gave up about eight per cent.
On Wall Street, JPMorgan Chase fell 3.6 percent, Citigroup lost 5.0 percent and regional bank First Republic sank 18.7 percent.
“What started as a regional banking crisis in the US has suddenly turned into a European crisis,” said the IG analyst. Chris Beauchamp,
“Certainly the ECB will not hike again because the crisis has intensified,” he told AFP.
The European Central Bank is set to hike interest rates again on Thursday to tackle high inflation, but the banking crisis raised concerns about the health of the sector as borrowing costs rose.
“Extreme fear and negative sentiment have resurfaced as the sector fails to address liquidity concerns and fears of contagion, raising questions about the likelihood of another financial crisis in Europe,” said the City Index analyst. Fiona Cincotta told AFP.


- Advertisement -

More News

Latest NEWS

- Advertisement -