Peace has lasted a day on the Ibex 35. The Spanish stock market bled again this Wednesday dragged by the bank, fearing new turbulence due to the collapse of Credit Suisse. Near mid-session, the fall was close to 4%, with all the large entities posting heavy losses.
If there were already concerns on the table, now the uncertain future of Credit Suisse and a possible contagion effect are added. The intervention in the US by Silicon Valley Bank (SVB) and other smaller entities were already increasing doubts among investors. To this is added the uncertainty of what the European Central Bank (ECB) will do this Thursday, prepared to raise interest rates again.
A triple front that is reflected in the price of entities throughout Europe. In Spain, Sabadell, with a 9% drop, was the one that fell the most in the middle of the session, with BBVA, Bankinter and Santander leaving 7%. Caixabank also suffered a decrease of 6%.
What is the trigger? “A new risk has emerged in European banking. It is Credit Suisse. We believe that many investors may be wondering: Could the Swiss bank be the new “SVB” in Europe? Time will tell, but of course the markets are not quoting anything well,” says Juan José del Valle, from the Activotrade securities agency. The Swiss entity, which has been experiencing difficulties for some time, fell 20% on Wednesday after the reference investor, the Saudi National Bank, ruled out expanding its participation.
The falls occur in all the great European squares. At mid-session the Euro Stoxx lost 3%, Paris another 3%, Frankfurt 2.6% and London 2.2%. The listing of the Swiss entity has had to be suspended, like that of Societé Générale, Monte dei Paschi and Unicredit.
The news casts doubt on the European sector as a whole. “The risk can continue until we see if the reasons or doubts about the viability of the bank are founded or not,” completes Del Valle.
