Even after President Joseph Biden’s reassurances on Monday, the financial markets are still reeling from the collapse of Silicon Valley Bank.
The banking sector’s stock price decline has contributed to today’s additional losses across Asia-Pacific stock markets.
The Topix Banks index in Japan is already down 7.4 percent, putting it on course for its lowest day since March 2020, when the epidemic first started. Mizuho Financial is down 7.1 percent, while Mitsubishi UFJ Financial Group is down 8.6 percent.
This has contributed to a 2.7% drop in Japan’s Topix stock market.
The Hang Seng index in Hong Kong has also fallen, this time by 2.35%.
The Hana Financial Group in South Korea is down nearly 4%, while the KOSPI index as a whole is down 2.4%. The S&P/ASX in Australia is down 1.4%.
According to Stephen Innes, managing partner of SPI Asset Management,
Last Friday’s Silicon Valley Bank failure triggered the year’s most turbulent market circumstances.
Notwithstanding President Joe Biden’s attempt to reassure depositors and investors on Monday, shares in a number of regional banks in the United States finished substantially down on Monday evening.
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The Federal Reserve and the Treasury Department increased lenders’ access to emergency funds and guaranteed deposits at Signature Bank (which was closed down on Sunday night) and Silicon Valley Bank.
Yet other regional banks also felt the heat, with First Republic Bank in San Francisco falling by 62% and Western Alliance Bank in Arizona falling by 47%.
The FTSE 100 in the United Kingdom dropped 200 points, or 2.58%, to finish at 7548 points on Monday, its lowest point total since the beginning of January.
Even though today’s opening bell is likely to be less tense than yesterday’s…
Last week’s demise of Silicon Valley Bank was the greatest bank failure in over a decade.
Because of the decline in the value of government bond and mortgage-backed securities as interest rates have risen, SVB suffered a $1.8 billion loss on the sale of assets. It then had trouble keeping up with consumer demands for withdrawals.
The likelihood of more substantial increases in borrowing costs is also being reevaluated, with central banks likely to be warier of fracturing yet another component of the financial system.