2023-05-04 18:24:53
Loss session for the European stock markets, with the Ibex-35 dropping 0.36% to 9,043 points after the decision of the European Central Bank (ECB) to raise interest rates.
It could have been worse. The indicator came to lose more than 1% in the most tense moments of the day, below 9,000 points, with investors especially attentive to what is happening on the other side of the Atlantic, where the tensions with the US regional banks remain at very high levels.
This situation undoubtedly affects the price of the sector in Europe, with heavy losses also for Ibex banks. Unicaja gave up more than 3% on Thursday, followed by Sabadell and Santander, which left more than 2% at the close. The red numbers also reached BBVA, CaixaBank and Bankinter, although ArcelorMittal and Aena were the most bearish values with losses of 5% and 3.2%, respectively.
Related News
The market is extremely concerned. Especially on Wall Street, where the president of the Federal Reserve (Fed), Jerome Powell, surprised on Wednesday by reducing tension by assuring that since the beginning of March the financial situation has normalized. A few words that come just a few days after the fall of First Republic Bank and with the focus that now weighs on two other entities in the country: PacWest and Western Alliance.
The first – with headquarters in Beverly Hills and 70 branches spread across the US with 44,000 million dollars in assets – collapsed 50% at the close of the European markets, extending its collapse to more than 71% in just six sessions in which that its value on the stock market has gone from 11.08 euros to 3.2 euros.
The tension is such that the entity has been forced to issue a statement in which it ensures that “it has not experienced unusual deposit flows after the sale of First Republic Bank and other news.” “Our liquidity remains strong and outweighs our uninsured deposits,” he insists.
But rumors about a possible sale of assets or a capital increase have put investors on guard. The same thing happened with Western Allianz, based in Arizona, which sank more than 41% on the stock market after the Financial Times published that it is also studying the sale of its business. “It is shameful and irresponsible,” the entity said in a statement referring to the article.
In any case, everything indicates that the trickle of victims within the US regional banks will continue in the coming weeks, in a kind of concentration process that could even be positive for the Fed. The greater the tension, the greater the credit contraction, the more economic cooling and, therefore, less pressure in the fight against inflation. The ‘B side’ is the risk of recession.
“Renewed banking tensions add another layer of uncertainty to an already complex outlook,” Fidelity analysts explain. “We believe that a cyclical recession continues to be the most likely scenario,” they add, referring to the US.
#Stock #Markets #blocked #due #tension #regional #banks