Home ›› 17 Mar 2023 ›› Stock
Asian markets slid Thursday with contagion fears hitting banks but European equities rallied after troubled banking giant Credit Suisse said it had taken a huge loan from the Swiss central bank.
Already-spooked investors have been in panic mode since the collapse of two regional US banks over the weekend sparked a sell-off across equities and ramped up concerns of a global recession.
While commentators have said the crisis should be contained and most major lenders had little exposure to the firms -- Silicon Valley Bank and Signature Bank -- news of trouble at Credit Suisse once again sent traders running for the hills.
Switzerland’s second-biggest bank tanked nearly 25 per cent Wednesday after Saudi National Bank -- its main shareholder -- said it would “absolutely not” up its stake in the firm.
That came a day after its annual report cited “material weaknesses” in internal controls at the firm, which has been hit by a series of scandals in recent years.
The Swiss central bank insisted that capital and liquidity levels at the lender were adequate, but stressed it was ready to make liquidity available to Credit Suisse.
Credit Suisse later announced it would borrow nearly $54 billion to “support” the group.
The news sent shares in the firm surging 32 per cent at the start of business Thursday.
And European markets rallied, with London up 1.5 per cent while Frankfurt and Paris each gained 1.7 per cent -- a day after all three lost more than three per cent.
However, the developments sent shivers through Asian markets as memories of the 2008 global financial crisis came flooding back.
Among banks, Japan’s Sumitomo Mitsui Financial and Mitsubishi UFJ Financial shed more than two per cent apiece, while South Korea’s Hana Financial Group gave up more than three per cent and HSBC dropped three per cent.
Broader markets were also in the red.
