Shares of European companies start to fall sharply amid US banking crisis

European markets were trading sharply lower on March 13 as global investors focused on the fallout from the Silicon Valley Bank collapse, putting banks on course for their worst day in more than a year, Report informs referring to CNBC.

The pan-European Stoxx 600 index was down 2.42% at 2:20 p.m. London time, with all sectors bar utilities in negative territory.

Bank stocks led losses with a 5.9% drop, the worst performance since March 4, 2022, when they fell 6.66% amid warnings their asset quality would be impacted by the Ukraine war.

The slide in stocks comes despite news that HSBC had agreed to buy the British arm of the troubled US tech startup-focused lender for £1. Customer deposits will be protected as part of the deal.

Shares of HSBC fell 3.5%, while Commerzbank slid around 12% and Credit Suisse was down 9.4%.

Across the Atlantic, US stock futures also turned negative after regulators announced a plan to backstop all the depositors in SVB and make additional funding available for other banks.

On March 10, Silicon Valley Bank was taken over by regulators after massive withdrawals a day earlier created a bank run. All SVB depositors will have access to their money starting March 13, according to a joint statement from the Treasury Department, Federal Reserve and the FDIC.

Elsewhere on March 12, US regulators shut down New York-based Signature Bank, a big lender in the crypto industry, in a bid to prevent the spreading banking crisis.

Asia-Pacific markets closed mixed on March 13 as investors reacted to the latest move by US regulators to stem further systemic risk.