European stock indices they turn around and fall this Friday, March 17, after opening higher. The drop is largely explained by the collapse of Credit Suisse shares which, despite having been bailed out by the Swiss National Bank, are extending losses.
Thus, they recover fears of a banking crisis, even though the main US authorities and banks took steps to rescue First Republic Bank.
In a crisis that began last Friday with the collapse of the Silicon Valley Bank, based in the United States, risk appetite plummeted earlier in the weekwhen investors they lost confidence in regional banks of the country and in the Credit Suisse in Europe. The week ended with a plunge in bond yields as investors lowered their expectations for future rate hikes.
Swiss bank shares -which have concentrated concerns about the sector in Europe- they fall 11.10%. The bank already suffered spectacular stock market crashes this week and given the fears for the banking sector, it received a bailout from the Swiss central bank to reinforce its liquidity for up to 50 billion Swiss francs (54,000 million dollars).
The index London FTSE 100 loses 0.3%, the CAC 40 of Paris yields 0.6% and the Frankfurt DAX falls 0.4%. In Madrid, the IBEX 35 it was also operating at a loss, down 1.4%.
In Wall Street futures were also trading in the redwith a fall of Dow Jones of 0.5%of 0.52% of the S&P and of 0.11% of the Nasdaq.
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After a turbulent week, eleven banking giants in the United States pledged on Thursday to rescue the entity First Republicwhich allayed fears of a new bankruptcy after the collapse of Silicon Valley Bank, Signature Bank and Silvergate last week.
This news was held by the Federal Reserve (Fed)the United States Treasury and two regulators, at a time of fear among investors of a risk of contagion to other banking entities.
He European Central Bank raised rates 50 basis points on Thursday, keeping his promise to fight the inflation even as some investors called for a pause in the rate hike cycle until the banking turmoil subsides.
The Markets anticipate a 25 basis point hike by the US Federal Reserve at their meeting next week, versus earlier expectations for a 50 basis point rise.
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