LONDON, March 15 Reuters Renewed unease gripped world markets on Wednesday as news that Credit Suisse39;s largest investor said it could not provide the Swiss bank with more financial assistance sent its shares and broader European shares sliding once more.
Signs of calm and stability in banking stocks, which have tanked in the past week, following the collapse of Silicon Valley Bank SVB, soon paved way for renewed selling as Credit Suisse shares fell to record lows.
Europe39;s bank index has now seen more than 120 billion euros evaporate 127.08 billion in since March 8. The index was last down 6.4 at 1154 GMT. This dragged lower European shares 2.4.
Investors rushed back into safehavens, with twoyear German bond yields down over 30 basis points at 2.60 . Twoyear treasury yield have tumbled 98 basis points in the last five days, the biggest drop since the week of Black Monday on October 19, 1987.
The Credit Suisse share price is falling and government bonds are rallying on the back of that. Still very much driven by the perceived health of the banking sector, but this time in Europe, said Antoine Bouvet, senior rates strategist at ING.
The European Central Bank is still leaning towards a halfpercentagepoint rate hike on Thursday, despite turmoil in the banking sector, given high inflation, a source close to its Governing Council told Reuters.
Markets are spooked by Credit Suisse headlines, said Richard McGuire, head of rates strategy at Rabobank in London.
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