Australian Stock Market Bloodbath Amid Momentary Fears ‘Lehman Brothers’ as Credit Suisse Shares Drop 24 Percent
- The Australian stock market plunged on Thursday
- Credit Suisse shares plunge 24%
Australian stocks have tumbled with banks tumbling as financial markets worry about the possible collapse of Swiss bank Credit Suisse triggering a new GFC.
The benchmark S&P/ASX200 index of the Australian Stock Exchange was down 1.7 percent during the first 90 minutes of trading on Thursday morning.
This came after Credit Suisse shares plunged 24 percent after a key investor refused to increase its stake in the embattled Swiss bank.
Saxo’s market strategist Jessica Amir said financial markets were worried about a repeat of the global financial crisis in 2008 when banks stopped lending to each other, triggering a liquidity or credit crunch.
“We think it could be, it’s basically generating messages of a possible Lehman Brothers moment,” he told Daily Mail Australia.
“Taking a step back, the big picture is that what’s happening is the interbank markets, there’s a liquidity drought there and this is a huge concern.”
While Australian banks are well capitalized, they were bleeding with Westpac shares slipping 2.2 percent to $21.18.
This was more severe than the 1.7 percent drop in the S&P/ASX200 which brought it back to 6,947.90 points.
Australian stocks have tumbled and banks have tumbled as financial markets worry about the possible collapse of Swiss bank Credit Suisse.
