Shares in Credit Suisse resumed their decline on Friday, giving up early gains, in a sign that investor sentiment remains fragile in a week that has seen the troubled Swiss lender secure a $54 billion lifeline.
A ratings downgrade and a U.S. lawsuit on Thursday offset some of the relief that stemmed from the emergency liquidity line the bank secured from the Swiss central bank earlier in the day.
Credit Suisse fell by as much as 5.8% following two days of sharp swings, which saw the its shares jump 20% on Thursday following a 24% drop on Wednesday when its largest investor said it would not be able to increase its stake. Volatility remained high.
The shares were last down 3.4% on Friday at 1.953 francs ($2.11).
“Whether depositors are sufficiently reassured to stem outflows over the next few days is a key question, in our view,” said Frédérique Carrier, head of investment strategy for RBC Wealth Management.
“While markets are relieved that the Swiss central bank stepped in, sentiment is bound to remain very fragile, particularly as investors will likely worry about the eventual economic impact of aggressive monetary policy tightening by the European Central Bank (ECB),” she added.
DBRS Morningstar on Thursday became the first global rating agency to cut the bank’s credit score, with a downgrade to “BBB”, which still qualifies Credit Suisse as investment grade.
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