Turbulence in the US banking industry sent the Dax plummeting on Monday. The leading German index closed 3.04 percent lower at 14,959.47 points. The MDax lost 2.74 percent to 27,232.34 points. Across Europe, equity markets also looked bleak, while US stock markets stabilized.
Turbulence in the US banking industry sent the Dax plummeting on Monday. The leading German index closed 3.04 percent lower at 14,959.47 points. The MDax lost 2.74 percent to 27,232.34 points. Across Europe, equity markets also looked bleak, while US stock markets stabilized.
“It is the fear of a “Lehman 2.0″ and the associated shock waves for the financial markets that unsettles investors,” wrote market expert Timo Emden. After Silvergate Capital, Silicon Valley Bank (SVB) and Signature Bank had collapsed. In the meantime, another US money house is apparently facing major problems with the First Republic Bank. Emden emphasized that there was a rampant fear of further risks of infection.
Over the weekend, the US Treasury, Federal Reserve and Deposit Insurance Agency said deposits at SVB and Signature Bank would be protected. The Fed also launched a new loan program to provide banks with liquidity. “Americans can rest assured that the banking system is secure,” said US President Joe Biden. He also wants to push for stricter regulation.
investors concerned
None of this could really reassure investors. “The market suspects that the problems that have become visible at the SVB are also in other balance sheets, including those of the really big ones,” stated analyst Jochen Stanzl from CMC Markets.
In the Dax, the Commerzbank papers brought up the rear with a minus of 12.7 percent. Deutsche Bank’s shares fell 4.9 percent.
The shares of the sports car manufacturer Porsche AG were also among the biggest losers in the leading index with a minus of 4.6 percent. The VW subsidiary missed its sales target for 2022. In addition, in the weak environment, investors cashed in, especially on shares that have recently performed well, which, in addition to Porsche AG, also caused Continental and Infineon to drop by more than 4 percent.
Defensive stocks held up better: Sartorius closed 0.8 percent up. RWE and Symrise left the market with little change. The papers of Deutsche Post also did comparatively well with a discount of 1.3 percent. The collective bargaining agreement with the Verdi union helped because it averted a longer strike, said brokers.
The euro rate rose sharply and was last listed at 1.0736 dollars. The European Central Bank set the reference rate at $1.0706. The triggers are falling interest rate expectations of the US Federal Reserve due to the turbulence in the American banking sector.
In the bond market, the current yield fell to 2.32 percent from 2.61 percent on Friday. The Rex pension index rose sharply by 1.72 percent to 126.35 points. The Bund future rose by 1.87 percent to 136.3 points.
Source: Stern
