Carnage in the Australian stock market after shares of Credit Suisse fell 24 percent
Australian stock market carnage amid fears of ‘Lehman Brothers’ moment as Credit Suisse shares fall 24 per cent
- The Australian stock market plummeted on Thursday
- Credit Suisse shares plummeted 24 percent
Australian stocks have plummeted as banks collapse as financial markets worry about the possible collapse of Swiss bank Credit Suisse, triggering another GFC.
The Australian Securities Exchange’s benchmark S&P/ASX200 fell 1.7 percent on Thursday morning during the first 90 minutes of trading.
This came after shares of Credit Suisse plunged 24 percent after a major investor refused to increase its stake in the embattled Swiss bank.
Saxo market strategist Jessica Amir said financial markets were worried about a repeat of the 2008 global financial crisis, when banks stopped lending to each other, leading to a liquidity or credit crunch.
“We think it could be possible, in fact it raises messages about a potential Lehman Brothers moment,” she told Daily Mail Australia.
“Take a step back, the big picture is what’s happening in the interbank markets is where liquidity is drying up and that’s a big concern.”
Australian stocks have plummeted and banks have plummeted as financial markets worry about the potential collapse of Swiss bank Credit Suisse
While Australian banks are well capitalized, they bled with Westpac shares falling 2.2 percent to $21.18.
This was more severe than the 1.7 percent drop in the S&P/ASX200 that brought it back to 6,947.90.
Credit Suisse’s woes come just days after the collapse of US Silicon Valley Bank and Signature Bank.
Saudi National Bank, which holds a 9.88 stake in Credit Suisse, has refused to increase its stake, leading to a 24 percent plunge in its shares just days after Rich Dad Poor Dad author Robert Kiyosaki warned it was the next bank would be to collapse.
The Swiss National Bank has now indicated that it is prepared to intervene.