Silicon Valley Bank collapse: Global financial stocks lose $465 billion amid contagion fears

Global financial stocks have lost $465 billion in market value due to the Silicon Valley Bank collapse. The MSCI Asia Pacific Financials Index dropped around 2.7 per cent to the lowest since November 29, widening losses early Thursday. 

While Asian lenders are being seen as more insulated from direct risk, investors questioned whether a government rescue plan will prevent any more fallout from SVB’s collapse. According to a report in Bloomberg, the combined market-capitalisation of the MSCI World Financials Index and MSCI EM Financials Index dropped about $465 billion in three days. 

Japan’s Mitsubishi UFJ Financial Group Inc slid 8.3 per cent, South Korea’s Hana Financial Group Inc fell 4.7 per cent and Australia’s ANZ Group Holdings Ltd lost 2.8 per cent, as per the report. 

Japan's Nikkei dropped 2 per cent. The Tokyo Stock Exchange banks index fell more than 5 per cent, setting it on course for its steepest drop in nearly six months. Bank shares in Singapore and Australia fell. Hong Kong shares in HSBC and Standard Chartered dropped more than 5 per cent.

US regional banks saw heavy selling overnight. Traders predicted that instability would turn policymakers cautious. 

Shockwaves from the collapse of Silicon Valley Bank pounded global bank stocks further on Tuesday as assurances from President Joe Biden and other policymakers did little to calm markets and prompted a rethink on the interest rate outlook. Biden's efforts to reassure markets and depositors came after emergency US measures to shore up banks by giving them access to additional funding failed to dispel investor worries about potential contagion to other lenders worldwide.

(With Reuters inputs)

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