Silicon Valley Bank: As investors reduced their exposure to lenders from New York to Japan in the wake of Silicon Valley Bank’s failure, the market value of global financial equities fell by $465 billion in only two days. The MSCI Asia Pacific Financials Index fell as much as 2.7% today, reaching its lowest level since November 29 as losses escalated. In Japan, Mitsubishi UFJ Financial Group Inc. dropped as much as 8.3%, Hana Financial Group Ltd. of South Korea dropped 4.7%, and ANZ Group Holdings Ltd. of Australia dropped 2.8%.
Asian Financials Index Plummets to Lowest Level Since November
There are worries that financial institutions’ investments in bonds and other securities may have an impact on the anxiety brought on by the SVB. As a result of predictions that the Federal Reserve will delay hiking rates owing to the turbulence in the banking sector, Treasury yields fell on Monday. “The financial markets are walking on eggshells,” John Woods, Credit Suisse Group AG’s chief investment officer for Asia-Pacific, said in an interview. “We must know with certainty what effect this is likely to have on the larger market. My impression is that the Fed will probably take a break since, in my opinion, the liquidity risk is the main factor at play,” he added.
Global Financial Markets Brace for Further Turbulence
Since Friday, the combined market value of the firms tracked by the MSCI Global Financials Index and the MSCI EM Financials Index has decreased by nearly $465 billion. While the KBW Regional Banking Index fell 7.7% on Monday, the biggest drop since June 2020, US regional banks were among the worst hit.
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