(Paris) Global markets are struggling on Friday, especially in Europe where stock markets fall 2%, in the face of renewed fears about the financial health of European banks, whose shares are suffering heavy losses.
The decline in the main European indices has deepened since the opening: Paris fell 2.26%, London 1.86%, Frankfurt 2.36% and Milan 2.54% around 8 a.m. (Eastern time).
The banking sector of the broader Stoxx Europe 600 index for its part fell by 4.81%, after a sharp increase in the cost of insurance against the risk of default (CDS) of several European banks.
Deutsche Bank was among the hardest hit, dropping 13.53%. Commerzbank also lost 8.54% in Frankfurt.
Deutsche Bank’s debt hedging tool now indicates a probability of default for Germany’s largest bank of 27.4% within the next five years. That probability is 19.3% for Commerzbank, according to financial news agency Bloomberg.
The cost of debt default insurance has increased for most European banks, but less than for Deutsche Bank. So that for Barclays and Société Générale, the probability of default is around 13%, according to these tools.
In Paris, Societe Generale shares fell 6.83%, the largest drop in the CAC 40 index, BNP Paribas also lost 6.67%. In London, Barclays lost 6.62% and HSBC 4.23%. Banco Sabadell fell by 7.11% in Madrid, ING by 5.05% in Amsterdam and Nordea by 8.6% in Copenhagen.
In Zurich, Credit Suisse fell by 6.79% and UBS by 6.31%. According to Bloomberg, they are under investigation by American justice and suspected of having helped Russian oligarchs to circumvent Western sanctions. Contacted by AFP, Credit Suisse declined to comment on the information and UBS did not respond.
Wall Street should also open lower, but more modestly than European markets. Futures contracts for the three major New York Stock Exchange indices were losing between 0.6% and 1% around 7:55 a.m. EST.
“Fear of contagion” in the banking sector “hasn’t gone away yet,” notes Finalto analyst Neil Wilson, pointing to the sharp decline in European bank stocks on Friday, which is “weighing on overall sentiment.” of the market.
“As I’ve said many times over the past two weeks, the crisis will only end when investors stop wondering who’s next.” “And it looks like we’re not there yet. »
A sign of investor nervousness, European government bonds, assets considered low risk, were highly prized. Germany’s 10-year debt rate, which moves inversely to the price of the bond, fell to 2.02% around 7:50 a.m. EST, down from 2.19% at Thursday’s close. .
Safe havens such as the dollar, yen and gold were also sought after. On the other hand, the euro fell by 0.86% against the dollar, to 1.0738 dollars for one euro.
“It is clear that after a brief respite at the start of the week, we are far from out of the woods,” warned Fiona Cincotta, an analyst at City Index, interviewed by AFP. “As interest rates continue to rise, fears about the banking sector are likely to grow.”
The central banks of the United States, England, Switzerland and Norway have indeed announced a new increase in their key rates, their main tool in the fight against inflation. This “increases the pressure” on banks, according to CMC Markets analyst Jochen Stanzl.
Oil prices also fall, which is often a sign that investors fear an economic recession. A barrel of Brent from the North Sea for delivery in May lost 4% to 72.87 dollars, while a barrel of American WTI for the same term fell 3.96% to 67.19 dollars around 7:50 a.m. (Eastern time). ‘East).
