Stocks stumble as banking turmoil sends investors to safety
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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