Another black day for the stock exchanges. Europeanstock markets closed sharply lower, in line with the negative trend on Wall Street. Investors fear contagion risk for the banking system after the events of Credit Suisse and the US regional banks. Government bond yields also fell sharply.
Despite efforts to secure Credit Suisse in Europe and First Republic Bank in the United States, financial markets are therefore in fibrillation. Piazza Affari closed trading down by 1.64%, a performance that brings to -6.5% the balance of a black week marked first by the crash of Silicon Valley Bank and the US regional banks and then by the Credit Suisse case. Madrid fell 1.9%, Frankfurt and Paris around 1.4%, London and Zurich fell 1%. Over the entire week, the Stoxx600 dropped almost 4% on the ground." Even with all the measures taken by the Fed, the US Treasury, the BoE, the Swiss National Bank and US banks to stabilize the situation, we are seeing that the markets are in difficulty", comments Craig Erlam of Oanda ahead of -8% of Credit Suisse, for which there is reason for a reorganization involving UBS, and -24% of First Republic despite the 30 billion dollars made available by 11 American banks, including JPMorgan Chase, Citigroup, Bank of America and Wells Fargo. First Republic which lost more than two-thirds of its value in the last week and is on track for its lowest close since 2011. The institute also suspended its dividends. Atlantic Equities downgraded First Republic to neutral, noting that the bank may need an additional $5 billion in capital to recover.
And it is the banking sector that is the most penalized: -2.9% the Stoxx600 sub-index. In Milan, Finecobank lost 4%, Unicredit 3.6%, Banca Mediolanum 3.3%. Falls of more than 4% for Santander in Madrid and ING in Amsterdam. On the Milan list, Iveco -4.3% and Tim -4% were worth mentioning, the latter with good trading volumes (270 million pieces traded) as the deteriorating financial environment, rising rates and the still long time for the network dossier contribute to lowering the appeal for investors. Few stocks are saved: Saipem (+1.7%) still among the best after the recommendations of Morgan Stanley, StMicroelectronics (+0.38%) in a holding session for technology, Eni (flat) which will launch a buyback plan of at least 2.2 billion euros and A2A, unchanged.
In the currency market, the euro stretched against the US note to $1.065 (from $1.0612). Euro/yen at 140.87 (139.54), dollar/yen at 132.13 (132.56). Oil fell about 2.7% with May Brent at $72.7 per barrel and WTI at $66.9 per barrel. Gas down 4% in Amsterdam to 42.5 euros per megawatt hour. Next week central bank parade with meetings, and rate decisions, of the Federal Reserve, Swiss National Bank, Norges Bank and Bank of England.
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Wall Street: Credit Suisse