Asian stocks slid on Thursday and investors turned to the safety of gold, bonds and dollars as Credit Suisse became the latest focal point for fears of a banking crisis, leaving markets on edge ahead of a European Central Bank meeting later in the day.
Credit Suisse’s announcement that it will take up an option to borrow as much as 50 billion Swiss francs ($54 billion) from Switzerland’s central bank soothed some of the gravest concerns and provided a floor to bank shares and a boost to Europe futures.
But sentiment was fragile and a nervous air hung over markets. MSCI’s index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell to 2023 lows and was down 0.9% mid-morning. Japan’s Nikkei (.N225) dropped 1.3%.
“I think we’re getting into the hard hat territory again,” said Damian Rooney, a dealer at Perth stockbroker Argonaut.
“The word contagion is knocking about…we’re getting fear across the whole board here.”
Credit Suisse stock (CSGN.S) plunged as much as 30% to a record low overnight. The Swiss franc suffered its biggest drop on the U.S. dollar in seven years.
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