- Credit Suisse shares fell below the two franc mark for the first time.
- In the meantime, a new low of CHF 1.56 was even recorded on Wednesday afternoon.
- Previously, a major CS shareholder, the Saudi National Bank, had announced that it would not be able to invest any more money in the bank.
The mood on the financial markets has deteriorated significantly. At the center of the current sell-off are the shares of CS, which have collapsed by around a quarter and thus cause a real flight from bank shares.
In a veritable downward tumble, Credit Suisse shares at times fell by more than 30 percent to a new record low of CHF 1.56.
Bad news from Riyadh
The President of the Saudi SNB, Ammar Al Khudairy, had previously apparently poured fuel on the fire with his statements to Bloomberg TV.
He clearly ruled out that the Saudi bank would inject any further money into CS – partly for regulatory reasons that would arise if the stake were increased to 10 percent.
“A panic sale arose in the Credit Suisse stock, which unsettled market participants beyond the banks and triggered position reductions,” says a trader, summarizing the current movement in the sector. In this environment, investors are also parting with shares in other financial stocks.
“A toxic mixture that has now chased the last positively tuned stockbroker off the stock exchange,” comments trader Andreas Lipkow.
Inflation fight goes on
And the interest rate and inflation worries have not really been banned either. On the contrary, it is once again becoming clear to market participants that the central banks still have a long way to go in fighting inflation.
It also remains questionable how the large central banks will react to the tense situation. According to previous plans, the European Central Bank (ECB) intends to continue its fight against inflation tomorrow with another significant interest rate hike. We’re talking about 0.5 percentage points.
Courses give way across Europe
The US Federal Reserve, which actually sent signals for further tightening, will follow next Wednesday. The next day, the Swiss National Bank will provide insight into its monetary policy.
In the market, the uncertainty about the banking sector is back with full force, according to the trade. Prices are also declining across Europe – both for the banks and for the markets as a whole. The German DAX, the French CAC40 and the British FTSE 100 all slump by at least 3 percent.