Stock Markets Wobble as Investors Eye Fallout From Credit Suisse Rescue

Other regional banks that have wavered after the collapse of Silicon Valley Bank and Signature Bank, which spooked depositors across the banking system, are set to fare better in early trading. Shares of PacWest and Western Alliance rose double-digit percentages in premarket trading.

In Europe, the takeover of Credit Suisse by UBS, the largest bank in Switzerland, was meant to calm the growing concern across markets about the health of the financial sector, and rescued Credit Suisse from the brink of a disorderly bankruptcy. Shares of UBS fell about 4 percent in trading in Zurich, while an index tracking Europe’s biggest banks slipped about 1 percent.

“The worst was averted but as cooler heads prevail the question is whether UBS just got Credit Suisse very cheaply, or is the banking system as a whole very overvalued,” said Peter Tchir, global market strategist at Academy Securities.

In Asia, markets closed with losses, with the Nikkei 225 in Tokyo down more than 1 percent and the Hang Seng in Hong Kong down more than 2 percent.

The banking turmoil continued to weigh on oil prices, reflecting worries that problems in the sector would put a damper on economic growth. Brent crude, the international benchmark, fell to nearly $70 a gallon, its lowest since late 2021, before recovering to trade modestly lower. West Texas Intermediate oil briefly slipped to just over $64 a gallon, also the lowest in more than a year.

Article source: https://www.nytimes.com/2023/03/20/business/markets-today.html