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Banks led stock markets lower on Monday and safe havens such as bonds rallied as a weekend deal to rescue Credit Suisse and promises of liquidity from central banks could not stem fears that a bigger crisis is brewing in the financial system.
Asia gains for S&P 500 futures and European futures reversed as the sun rose in London. S&P 500 futures were last down 1 percent. European futures dropped 1.2 percent and FTSE futures fell 1.5 percent, and investors rushed to price in interest rate cuts.
In Hong Kong, HSBC stock dropped 7 percent in its worst session for six months. Standard Chartered shares fell nearly 8 percent and turnover was high. Tokyo banks dropped 1.9 percent and bank stocks led a 1.6- percent drop for MSCI’s broadest index of Asia-Pacific shares outside Japan.
Central banks try to calm markets after UBS deal to buy Credit Suisse
Over the weekend, UBS said it would buy Credit Suisse for 3 billion francs ($3.2 billion). The Federal Reserve, European Central Bank and Bank of Japan pledged to make it even easier to buy dollars, upping the frequency of supply operations.
But with some Credit Suisse bondholders in line to be left with nothing, and nerves running high after a week where concerns mushroomed that regional U.
