Asian stock exchanges in the red following the UBS-Credit Suisse deal

Sitting in the red for the Asian stock exchanges after the agreement for the acquisition of Credit Suisse by UBS. Tokyo lost 1.54%, Sydney 1.38 and Seoul 0.69%. Heavy Hong Kong, which drops 3.2% at the opening, while Shenzhen and Shanghai contain the declines to 0.4%. Futures on Europe and the United States down with that on the Euro Stoxx 50 dropping 1.1% and those on the Dow Jones and Nasdaq down by 0.8% and 0.4%. After an initial positive assessment of the bailout and the injection of liquidity by central banks, which had pushed futures on the Euro Stoxx up by 1.4%, caution prevails among investors due to the turbulence that is affecting the markets.

Futures on the European banking sector collapse: futures on the Euro Stoxx index of the banking sector maturing in June lose 6% while in Hong Kong the colossus HSBC loses 7%. HSBC also pays the exposure to Credit Suisse’s AT1 bonds, the value of which was canceled as part of the rescue of the Swiss giant, penalizing the holders of the bonds even compared to the shareholders of the Swiss group.

The Hong Kong Stock Exchange subsequently widened losses despite UBS’s bailout of Credit Suisse: the Hang Seng index, over an hour after the closing of trading, dropped 3.46%, to 18,843.49 points.

The Monetary Authority of the former colony, in a note, assured this morning that the local banking sector has an “insignificant” exposure with Credit Suisse, whose local branch assets are estimated “at about 100 billion dollars Hk ($12.7 billion)”, equal to “less than 0.5% of Hong Kong’s total banking sector assets”. Bank stocks are in trouble, with HSBC losing more than 5%.

Commodities are also suffering from market uncertainty after the Credit Suisse shock. Oil is no exception, losing almost 3%. US WTI contracts for April fell by 2.77% to 64.89 dollars a barrel, while Brent listed in London and with
delivery in May loses 2.74% to $70.97. The price of gas in Amsterdam is also beginning to fall sharply, while winter is preparing to give way to spring with European stocks still half-full and with the turbulence on the financial markets which are causing tensions in practically all classes of assets. The price of TTF futures in Amsterdam dropped 4.9% to 40.75 euros per megawatt hour, the lowest since the beginning of 2022.

And meanwhile, as the Credit Suisse bailout scares the markets, Gold prices soar above $2,000 an ounce for the first time since March 2022. On the spot market, the yellow metal, the safe haven asset par excellence, jumped by 3.9% to 2,005 dollars.

Source: Ansa

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