European equities were sharply lower Wednesday, with banking stocks in a deep slump due to the global ramifications of Silicon Valley Bank’s troubles and additional negative news for Credit Suisse.
The U.K.’s FTSE 100 fell by -3.8%, France’s CAC 40 by -3.6% and Germany’s DAX by -3.3%.
The Stoxx 600, a pan-European index, ended the day 3% lower, with all of its sectors in the negative.
On February 24th, 2022, Eikon data showed banking stocks suffering their most dramatic drop in a single session since Russia began its full-scale invasion of Ukraine – a 7% plummet.
A 6.7% decrease occurred in the oil and gas industry and a 5.6% decline was seen in mining stocks.
After the statement from Saudi National Bank, Credit Suisse’s main investor, that they would not provide the Swiss-based bank with further financial assistance, the shares of Credit Suisse CSG.N-CH plummeted to the lowest point on the blue-chip index.
At the end of the day, the company’s stocks had dropped 24%, having dipped as low as 30% during the session.
In an interview with CAN that was cited by Reuters, Ulrich Koerner, the CEO, declared: “We have a really, really strong capital and liquidity.”
Koerner noted that they satisfy and surpass virtually all regulatory standards.
Credit Suisse Collapse…another Lehman
The collapse of Credit Suisse reignited a sell-off in the banking sector after a short-lived recovery the day before. Several major banks, such as BNP Paribas, Societe Generale, Commerzbank and Deutsche Bank, experienced sharp losses in the aftermath.
This morning, trade in several banking stocks, including Credit Suisse, was temporarily suspended due to the drastic decrease in their value. None of Deutsche Bank, Societe Generale, Commerzbank and UBS chose to make a statement….Did you remember 2008 Financial Crisis?
The Asian-Pacific markets saw a surge in trading activity Tuesday, while Wall Street’s bank stocks experienced a rebound due to the belief that the consequences of Silicon Valley Bank’s downfall would not spread.
On Wednesday, there was a decline in U.S. stocks due to an onset of uneasiness.
Spring Budget
Jeremy Hunt, the U.K. Finance Minister, recently declared his “Spring Budget,” which includes extensions of reductions on fuel duty and energy assistance plans. This announcement follows the public sector strikes that have been occurring due to pay and work environment grievances from teachers, civil servants, railway personnel, and medical interns.
Jeremy Hunt, the Chancellor of the Exchequer, proclaimed that the British economy was disproving those who had questioned it, as evidenced by the decline in gilt rates, mortgage rates, and inflation. He also stated that the UK would be able to dodge a technical recession.
