Shares of European banks fall under pressure from Credit Suisse
European banks were rocked by another turbulent session on Wednesday, dropping as much as 10% amid worries about the global fallout from last week’s Silicon Valley Bank collapse and Credit Suisse’s sharp fall, sending shares of several banks, including Credit Suisse, down. trading has been temporarily suspended.
Shares in Switzerland’s second-largest bank, Credit Suisse, fell more than 25% to a new all-time low after the company’s main shareholder, the National Bank of Saudi Arabia, announced it could not shore up its investment in Credit Suisse, citing regulatory concerns. .
This latest development is yet another blow to a group that has endured a series of financial scandals.
European indices fell due to the weakness of banks. The French CAC 40 fell 3.5% and the German DAX shed 3%. London’s FTSE 100 fell 3.1%.
Wall Street opens with stocks falling
Wall Street stocks tumble on Wednesday as worries about the soundness of banks on both sides of the Atlantic intensify.
At the opening, the Dow Jones Industrial Average fell 1.51%, the Nasdaq fell 1.20%, and the S&P 500 fell 1.39%.
The bank’s shares have already faltered since the collapse of Silicon Valley Bank. The historic failure has sparked panic despite unprecedented US intervention to contain spillovers and calm markets. President Joe Biden and regulators have tried to reassure the public that risks are contained and deposits at other banks are safe.
The biggest losses were associated with small and medium-sized banks, which are considered more at risk of customers trying to withdraw their money en masse. First Republic Bank fell 7.7% after rising 27% the next day. Shares of Huntington Bancshares fell 5.7%.
Large banks were not affected as much, but still fell. JPMorgan Chase lost 3.6%.
Banks have struggled for the best part of the year as higher interest rates keep fewer people and businesses borrowing, part of the Federal Reserve’s goal of trying to cool the economy and ease four decades of high inflation.
Investors fear that the Fed may respond to continued upward pressure on prices by accelerating the pace of interest rate hikes to dampen economic activity and inflation.