Market shocks from Credit Suisse
Three sharp falls with two weak recoveries in between: despite measures by the US and Swiss authorities, the banking sector ended a “black week” marked by a new plunge today, sending all European Stock Exchanges.
Concerns center mainly on Switzerland’s Credit Suisse, whose stock fell 8% today, and US-based First Republic, which is down 26.5%. Within a week the two banks recorded a drop of 25% and almost 70% respectively.
More broadly, Europe’s banking index fell 2.85% today, extending losses to 11.47% in a week – the biggest decline in six months. Weekly losses were notable for Société Générale (-16.94%), Commerzbank (-19.53%), ING (-14.76%), Standard Chartered (-14.30%) and Unicredit (-14.31%).
The shares of American banks they are headed for a second drop of around 10%, on average, within a week. Middle-sized regional banks are mostly hit as investors wonder “who will be next to need support,” Oanda analyst Craig Erlam said.
“The value of a bank is the trust we have in it and we need to restore that,” explained Vincent Javins of JP Morgan AM.
This trend led to a fall in the European Stock Exchanges: Paris closed with losses of 1.43%, Frankfurt with 1.33%, Milan with 1.64% and London with 1.01%.
Wall Street is also moving lower. Around 18:50 (Greece time) the Dow Jones industrial index lost 1.07%, the Nasdaq 0.80% and the S&P 1.01%.
Source: Skai
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