Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Thursday, Oct 10, 2024

Deutsche Bank heads new rout for banking stocks on financial markets

Deutsche Bank heads new rout for banking stocks on financial markets

There is a renewed rush away from banking shares across Europe as the market's attention turns towards Germany's largest lender.
Germany's largest bank has become the focus in a new wave of selling across banking and wider financial stocks, less than a week after the forced takeover of Credit Suisse.

Deutsche Bank shares fell more than 14% at one point during a volatile day of trading Europe-wide, but in late trading were around 8% down.

The bank's so-called credit default swap rate was up by almost a fifth.

It essentially represents a sharp jump in its cost of insuring against the risk of default.

Major banks in France and Germany also suffered share price hits, with Commerzbank around 5% down heading towards the close, while BNP Paribas and Societe Generale suffered similar declines of around 5% and 6% respectively.

In the US, shares were also hit, with troubled regional lender First Republic Bank initially falling 4% soon after opening, but was later 1% down.

London-listed banks were not spared pain either.

Markets have been jittery for weeks in the wake of the failure of Silicon Valley Bank in the US.

Fears about the impact of rising interest rates on banks' bond holdings have since claimed a major scalp in Credit Suisse, Switzerland's second-largest bank.

It was forced by regulators into a takeover by larger rival UBS last weekend, before financial markets opened for business on Monday.

It took until Friday for a new focus to emerge.

Chris Beauchamp, chief market analyst at IG, said: "We are still on edge waiting for another domino to fall, and Deutsche is clearly the next one on everyone's minds (fairly or unfairly).

"Looks like the banking crisis hasn't been entirely put to bed."

Banking stocks were down across the board in Europe, with the German DAX almost 2% down in late trading.

Deutsche Bank employs 7,000 staff in the City of London where the FTSE 100 was 1.26% lower by the end of the day.

Barclays closed 4.2% down, while NatWest, HSBC and Lloyds finished with declines of 3.6%, 2.6% and 2.4% respectively.

Wider economy stocks - such as mining and energy shares - also fell on fears the crisis of confidence in the banking sector would curtail the availability of credit and therefore economic growth.

The government and the Bank of England have previously moved to reassure investors that the UK banking system is at no risk as the financial strength of lenders is very high compared to pre-financial crisis levels and their European peers.

HSBC itself has spoken out in support of the sector.

"We're not worried about liquidity issues for UK banks, as they run with high levels of central bank reserves and shouldn't need to sell bond portfolios to meet deposit outflows," it said.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Just as hopes had risen that contagion would be contained, banking stocks in Europe have been battered again by fears that fresh problems could be lurking...

"Waves of bad news keep hitting the banking sector and the tide doesn't look like it's set to turn any time soon."

But she added the European Central Bank had made clear it was standing by to boost liquidity if needed, and noted that the Bank of England was also firm in its belief there is still no systemic risk.
Comments

Oh ya 2 year ago
DB will be the next to fail, and then another and another. They papered over the 08 financial problems and now it is coming back but only bigger. Making UBS a bank that lost 140 billion in 08 take over CS a bank that lost only 8 billion in 08 shows you they are just trying to kick the can a little further down the road. And you know they stole 17 billion from the bond holders of CS thus proving holding bonds means nothing now days. Bank runs are picking up speed

Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×