Daily Express

Agony for markets as bank jitters wipe £80bn off shares

- By Geoff Ho

NEARLY £80billion was wiped off shares as markets suffered their biggest drop in more than a year amid fears about the health of the banking sector.

The FTSE 100 fell 3.7 per cent to 7,354, cutting an estimated £77.8billion off the combined value of all the firms in Britain’s blue chip stock market index.

Like London, markets across Europe were in the red due to a sell off in the financial sector. Trading in a number of big European banks was temporaril­y halted yesterday morning.

Bank shares have been under pressure since the collapse of the US technology lender Silicon Valley Bank.

It worsened yesterday after troubled Credit Suisse’s largest investor, Saudi National Bank, refused to provide it with additional support.

Russ Mould, of broker AJ Bell, explained that in the wake of SVB and now Credit Suisse, investors were asking questions about the liquid cash reserves of banks and whether they still commanded the confidence of markets.

“What’s happening is that the thought of European banking contagion is increasing­ly frightenin­g people. Now SVB was a badly run bank. Credit Suisse is a badly run bank,” he said.

“That’s the comforting talk, but Credit Suisse is interconne­cted to everybody [in the global financial system] and its exercising people, who are trying to work out who is exposed to who.”

Saverio Berlinzani, ActivTrade­s’ senior analyst, said “tension is exploding” in the banking sector due to Credit Suisse. He added: “There does not seem to be a bank run yet, unlike what happened in the case of SBV. However, confidence in the markets is falling dramatical­ly and most stock markets are seeing heavy losses.” Interactiv­e Investor’s head of investment, Victoria Scholar, said that with the banking sector in turmoil, the Bank of England could pause interest rate hikes.

She said: “The market turmoil and the economic fallout are paving the way for a much smaller chance of a rate hike this month. Interest rate futures are now pricing in a 60 per cent chance the central bank opts for no change at its next monetary policy committee meeting.”

 ?? ?? PRESSURE: Credit Suisse
PRESSURE: Credit Suisse

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