European markets opened close to balance after the announcement of exceptional measures by the American markets but then stalled: Paris fell by 2.33%, Frankfurt by 2.41%, after having lost more than 3%, and London by 2.01% around 09:50 GMT (10:50 a.m. in Paris). Milan even fell by 4.18%.
In Asia, the Tokyo Stock Exchange lost 1.11% but Shanghai gained 1.20% and Hong Kong 1.95%.
“We had forgotten how much the banking system relies on trust,” Lionel Melka, a partner at Swann Capital, told AFP.
Confidence in US regional banks appears shattered after three bankruptcies in recent days, including that of Silicon Valley Bank. “Only the big banks seem safe,” he continues.
The US authorities took several measures over the weekend to try to stem mistrust in the US banking system and avoid massive withdrawals of deposits that could further weaken these institutions.
Among the measures announced on Sunday, the authorities will notably guarantee the withdrawal of all deposits from the bankrupt bank Silicon Valley Bank (SVB).
The US Federal Reserve (Fed) has also agreed to lend the necessary funds to other banks that may need them to honor withdrawal requests from their customers.
“It’s not a federal bailout but it provides guarantees” in order to “find buyers quickly”, explains Alexandre Baradez, analyst at IG.
He underlines the existence of “a phase of stress” on the markets even if the situation remains, according to him, far from 2007.
Bright red sitting news for banks
On Friday, European banks fell again on Monday, with an even more marked movement for banks perceived as less solid: Credit Suisse 9.90% hit a new historic low point and Commerzbank fell 12% while BNP Paribas dropped 5.29% and Societe Generale 5%.
HSBC, which lost 3.58%, announced Monday morning to buy the British branch of Silicon Valley Bank for one pound, which allows customers to “access their deposits and their banking services normally”.
New deal for the Fed?
This crisis in the banking sector “changes the game on the expectations of the Fed”, underlines Ipek Ozkardeskaya, of Swissquote Bank.
The sharp rises in interest rates over the past year in order to fight inflation have contributed to weakening the banks and slowing down economic activity.
The latest events could convince US central bankers to slow down at their next meeting on March 21-22.
While the majority of investors were considering a return to a sharp rise in key rates, of 0.5 percentage point, this option now seems to have been ruled out.
Sovereign rates fell on the bond market on Monday. The interest rate for the 10-year US loan was 3.50%, against 3.70 on Friday at the close, while the German rate at the same maturity was trading at 2.21% against 2.50% on Friday at fence.
The dollar fell against other currencies: the euro recovered 0.27% to 1.0672 dollars and the pound 0.45% to 1.2085 dollars around 09:45 GMT.
Bitcoin rebounded 2.43% to $22,010, erasing much of the losses that followed the announcement of SVB’s difficulties.
Full throttle entry for Adnoc
The action of the Emirati gas company Adnoc Gas jumped 25% during the first exchanges for its IPO in Abu Dhabi. The operation enabled it to raise more than 2.3 billion euros for the circulation of only 5% of its capital.
In addition, the Saudi oil giant Aramco (+0.46%) announced Sunday record profits in 2022, to the tune of 161.1 billion dollars, thanks to the surge in crude prices.
Oil prices fell: a barrel of Brent was worth 81.24 dollars (-1.99%) and the American WTI 75.15 dollars (-1.86%) around 09:35 GMT.