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Wednesday, March 29, 2023

Fear of bank collapse in the US: European stock markets recorded their biggest daily drop of the year

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Confidence in US regional banks appears to have fallen after three bankruptcies in recent days, including Silicon Valley Bank.

Photo: Madridiario

The European stock markets registered this Monday, March 13, their biggest daily drop of the year, dragged down by bank valuesdespite the intervention of the authorities to limit the consequences of the sudden bankruptcy of Silicon Valley Bank.

The pan-European STOXX 600 index closed the day down 2.3%, with banking, financial and insurance stocks, along with energy, suffering the biggest selling.

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European bank stocks fell an average of 5.7%, marking their worst drop in two days since the war between Russia and Ukraine broke out early last year. “Concerns about the resilience of the sector’s balance sheets in the face of the SVB bankruptcy rattled investors,” the traders said.

Risk aversion moves led to stocks Credit Suisse to fall 9.6%, to a new all-time low. For his part, Germany’s Commerzbank plunged 12.7%, France’s Societe Generale and Spain’s Sabadell fell 6.2% and 11.4%, respectively.

HSBC lost 4.1% after the British bank bought SVB’s UK subsidiary for £1, rescuing a key lender to UK tech startups.

However, euro zone banking supervisors saw limited consequences for the region’s banks from the collapse of US lenders, while Moody’s Investors Service said European banks were unlikely to be affected by losses on bond portfolios.

Among other actions, Shell, BP and TotalEnergies SE lost 4-5% on falling oil prices.

Source: Ambito

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