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World stocks gyrate as bank contagion fears bite

25 March 2023 09:22 (UTC +04:00)

Global stock markets swooned on Friday as fears about contagion among banks hobbled shares of lenders such as Deutsche Bank (DBKGn.DE), with the flight from risk shoring up the dollar and driving bond yields lower, APA reports citing Reuters.

Market sentiment was hurt by a sell-off in Deutsche shares, which tumbled as much as 15%, as its credit default swaps , which reflect the cost of insuring debt against the risk of non-payment, shot to their highest in more than four years.

The failure of U.S. regional banks Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O) this month triggered fears of a banking contagion and prompted U.S. Treasury Secretary Janet Yellen on Thursday to pledge action to safeguard bank deposits.

As concerns about the stability of banks persist, we expect further and intensifying market volatility," Green said.

The Dow Jones Industrial Average (.DJI) reversed earlier losses to end up 0.41%, the S&P 500 (.SPX) added 0.56%, and the Nasdaq Composite Index (.IXIC) rose 0.31%.

JP Morgan Chase (JPM.N) dropped 1.52%, the S&P 500 banks index (.SPXBK) was down 0.33%, while the KBW regional bank index (.KRX) climbed 2.92%.

In Europe, the STOXX 600 index (.STOXX) fell 1.37%, helping to drag the MSCI World share index (.MIWD00000PUS) down 0.21%.