The Silicon Valley bank collapse crisis dealt a heavy blow to global financial stocks, which lost $465 billion of their market value in just two days, as investors reduced their exposure to the banking sector from New York to Japan.
Losses deepened Tuesday as the MSCI Asia-Pacific stock index fell 2.7 percent to its lowest level since November 29, according to Bloomberg.
In Japan, Mitsubishi Financial Group shares fell 8.3 percent, South Korean Hana Financial Group shares fell 4.7 percent, and Australian ANZ Group Holding shares fell 2.8 percent.
According to Bloomberg, the total market value of companies included in the MSCI Global Financial Index and the MSCI EM Financials Index has decreased by about $465 billion since Friday. US regional banks were among the hardest hit on Monday, with the KBW Regional Banks Index dropping 7.7 percent, its biggest drop since June 2020.
Markets fear that financial companies may have their investments in bonds and other financial instruments affected by the anxiety caused by the collapse of Silicon Valley Bank.
US Treasury yields fell yesterday, Monday, amid expectations that the Federal Reserve may delay raising interest rates to ease the turmoil facing the banking system following the collapse of 3 banks within days, which are Silvergate, Silicon Valley and Signature.
In an interview with Bloomberg Television, John Woods, chief investment officer for Asia-Pacific at Credit Suisse Group, said: “Financial markets are walking on eggshells. We really need to know exactly what impact this is likely to have on the broader market. My sense. Is that the Fed may pause because I think the crisis is very much about liquidity risk.
