Wall Street falls sharply on global concern about the banking sector

The New York Stock Exchange opened lower on Fridayagain uneasy about the earthquake that shakes the western banking sectorthis time with the German Deutsche Bank in its sights and with investors favoring the safest assets.

In early trading, the Dow fell 0.8%, the technology-based Nasdaq fell 0.7% and the broader S&P 500 index fell 0.7%.

Stocks of large US banks such as JPMorgan Chase & Co, Wells Fargo and Bank of America were all down 1-2% in early trading.

The actions of regional lenders First Republic Bank, PacWest Bancorp, Western Alliance Bancorp and Truist Financial Corp all lost between 1% and 5%.

The S&P 500 banking index and the KBW regional banking index, which had already hit their lows since the end of 2020 in the previous session, were down 1.6% and 1.2%.respectively.

Wall Street falls dragged by the European markets that registered heavy losses this Friday before a rebound in fears about the financial health of European banks, whose shares suffer sharp falls.

After the collapse of several banks in the United States (Silicon Valley Bank and Signature Bank) and the credit suisse bailoutthe financial markets set their sights on the Deutsche Bankthe largest bank in Germany.

The German group that leads Christian Sewing it came to collapse 15% on the stock market this Friday, below 8 euros, amid growing doubts about its debt portfolio and the shareholding profile of the group, with the Qatari sovereign wealth fund as the most relevant partner (4.7%), followed by the entity’s own treasury stock (3%). The capitalization of the Teutonic bank stands at 17,000 million euros, less than BBVA (38,000 million) or Caixa (28,000 million).

This Friday morning the decision of Deutsche Bank to redeem a subordinated bond early, whose value had plummeted in recent weeks, was announced. The bank has just completed a successful turnaround that boosted its profitability. All in all, the firm’s share price has fallen by 27% in 2023.