Asian markets fall after Credit Suisse’s move to borrow billions

Turmoil in financial markets showed few signs of abating Thursday, as investors weighed whether turmoil in the banking industry in the United States and Europe would lead to a downturn in the global economy.

In the early hours of the day in Zurich, Credit Suisse – “a systemically important global bank” in its own words – said it would take advantage of a lifeline from the Swiss central bank and borrow up to $54 billion. Euro Stoxx 50 futures jumped more than 2 percent on the news, a sign that battered European stocks could rebound when trading opens later in the day. S&P 500 futures also rose.

But stocks in Asia were in the red, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng down more than 1 percent. in south korea, Regulators have warned lenders To prepare for the fallout from the Silicon Valley bank collapse, they said they might order local lenders to secure more capital.

The issues plaguing Silicon Valley Bank and Credit Suisse, which have been plagued by years of mismanagement, are very different. However, their struggles have raised fears that there are more unseen dangers in the financial industry. For many investors, the next trigger could come in a few hours, at the European Central Bank meeting in Frankfurt.

The bank had decided to raise interest rates again to counter the rise in prices. But the calculus changed within days after three US banks collapsed in less than a week, in part because they underestimated the impact of rapidly rising interest rates.

“With the emergence of companies and financial institutions that are unable to withstand the rapid rise in interest rates, the European Central Bank is now faced with the same situation facing the US authorities and must choose between tackling inflation and stabilizing the financial system,” said Yunosuke Ikeda, an analyst at Nomura, a Japanese bank. , he wrote in a report on Thursday.

Jin Yoo Young Contribute to the preparation of reports.