European stocks slide 2.5% as Credit Suisse craters and banks briefly halted from trade: Live updates

European stock markets were sharply lower Wednesday, with banking stocks in deep negative territory amid the global Silicon Valley Bank fallout and more bad news for Credit Suisse. The pan-European Stoxx 600 index was down 2.5%, with all sectors trading in the red.


FTSE 100 7409.7 -227.41 -2.98
DAX 14846.67 -386.16 -2.54
CAC 40 Index 6936.86 -204.71 -2.87
FTSE MIB 25819.08 -981.9 -3.66
IBEX 35 Idx 8842.3 -316.7 -3.46
Banking stocks plunged 6.3%, followed by the energy sector, which was down 5.4%. Credit Suisse dropped to the bottom of the blue-chip index after the bank’s biggest lender, Saudi National Bank, said it would not be able to offer it more financial help. Its shares were down 16% at 3:00 p.m. London time after falling as much as 30% earlier in the session. In an interview with CAN quoted by Reuters, CEO Ulrich Koerner said: “Our capital, our liquidity basis is very, very strong.” “We fulfill and overshoot basically all regulatory requirements,” Koerner added.
The Credit Suisse fall caused a wider banking sell-off to resume after the sector staged a modest recovery Tuesday. BNP ParibasSociete Generale, Commerzbank and Deutsche Bank were among the banks to post steep declines. Several bank stocks, including Credit Suisse, were temporarily halted from trade during the morning due to the steep losses. Deutsche Bank, Societe Generale, Commerzbank and UBS declined to comment. That comes despite buoyant trade in Asia-Pacific markets overnight and on Wall Street Tuesday, where U.S. bank stocks rebounded on optimism that the contagion risk from Silicon Valley Bank’s collapse was contained. U.S. stock futures were lower early Wednesday. Meanwhile, U.K. Finance Minister Jeremy Hunt unveiled his “Spring Budget,” which includes extensions of the cut to fuel duty and of energy support measures. It comes as teachers, civil servants, rail workers and junior doctors strike over pay and working conditions. Hunt also said the British economy was “proving the doubters wrong” as gilt rates, mortgage rates and inflation come down, and that it would avoid a technical recession.

Adjusting policy due to market sell-off ‘likely to cause further alarm,’ strategist says

Credit Suisse’s woes are “not new news,” Rabobank’s head of rates strategy Richard McGuire told CNBC — but the “jitters related to a possible systemic read across from Silicon Valley Bank” are. McGuire does not see central banks being “blown off course” by current stresses, saying that to do so would see them abandon their mandates to bring down inflation. He noted the market is now pricing in a little under 50% odds of one more 25 basis point rate hike from the U.S. Federal Reserve. “While reduced bank lending is a de facto tightening in and of itself we struggle to see the Fed and the [European Central Bank] relying upon such a mechanism when both its quantum and duration is impossible to predict,” McGuire said by email. “Furthermore, adjusting policy in the face of recent events is more likely to cause further alarm (by implicitly acknowledging the seriousness of the problem) rather than provide reassurance the situation is under control,” he added. “While there is an inherent unpredictability to the current situation, we think the market is overly quick to price out further tightening, meaning safe haven curves are likely to, once again, flatten back.” — Jenni Reid