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Tuesday, March 21, 2023

European markets fell dragged by Credit Suisse which plunged 8%

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European stock indices extended their weekly slide and posted losses of up to 2% this Friday, March 17, after opening higher. The decline was largely explained by the Credit Suisse stock plunge which, despite being bailed out by the Swiss National Bank, extended losses, compounded by the collapse of the First Republic Bank that dragged down the banks that saved it on Thursday.

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So, The European stock markets ended this Friday in the red for a week of tormentsa, with fears once again concentrated in the banking sector, despite various attempts to calm investors.

The Paris Stock Exchange lost 1.4%; Frankfurt, 1.3% and London, 1%. On his side, Milan lost 1.6%, and Madrid, 2%. In the banking sector, Credit Suisse’s share suffered a fall of 8.01%, for a total loss in the week of a quarter of its market value.

This is 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.

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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.

Source: Ambito

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