BEIJING (AP) – Asian stock markets tumbled yesterday after Wall Street sank as a plunge in Credit Suisse shares reignited worries about a possible bank crisis following the failure of two United States (US) lenders.
Shanghai, Tokyo, Hong Kong and Sydney slid as Asian bank stocks fell, reversing Wednesday’s gains. Oil prices rose.
Wall Street’s benchmark S&P 500 lost 0.7 per cent on Wednesday after being down as much as 2.1 per cent at one point following a 30 per cent fall in Credit Suisse’s share price. That fuelled jitters about global banks that are under strain from interest rate hikes by the Federal Reserve and other central banks to cool inflation.
The Credit Suisse decline “shakes already fragile investor sentiment”, said Venkateswaran Lavanya of Mizuho Bank in a report.
The Nikkei 225 in Tokyo retreated 0.9 per cent to 26,998.07. Mizuho Bank was down 3.9 per cent, while Japan’s number five bank, Resona Holdings, lost 4.8 per cent.
The Hang Seng in Hong Kong shed 1.4 per cent to 19,271.65. Standard Chartered Plc lost 2.5 per cent and HSBC was 2.5 per cent lower.
The Shanghai Composite Index lost 0.5 per cent to 3,245.65 after government data on Wednesday showed the Chinese economy is recovering more slowly than expected following the lifting of anti-virus controls.
China’s banks don’t face the same pressures as foreign lenders because Beijing has held its benchmark lending rate steady since mid-2022 and keeps the country sealed off from global capital flows. State-owned Industrial & Commercial Bank of China, Ltd and Bank of China, Ltd were up 0.1 per cent.
The Kospi in Seoul was 0.2 per cent lower at 2,375.69 and Sydney’s S&P-ASX 200 sank 1.4 per cent to 6,969.30.
On Wall Street, the S&P 500 declined to 3,891.93. The Dow Jones Industrial Average lost 0.9 per cent to 31,874.57 after being off more than two per cent at one point.
The Nasdaq composite recovered from a steep decline to close up 0.1 per cent at 11,434.05.
Markets recovered some of their losses on Wednesday after Switzerland’s central bank said it could provide some assistance to Credit Suisse “if needed”.
Yesterday, Credit Suisse said it will borrow up to USD54 billion from the central bank.
Credit Suisse has been fighting troubles for years, including losses from the 2021 collapse of investment firm Archegos Capital.
Its share price plunge reignited worries about the global industry after Silicon Valley Bank and Signature Bank collapsed in the second- and third-biggest US bank failures in history.
On Wall Street, bank stocks plunged on Monday, recovered on Tuesday and tumbled again on Wednesday.
First Republic Bank sank 21.4 per cent, a day after soaring 27 per cent. JPMorgan Chase slid 4.7 per cent.