Banking stocks in Japan fell on Thursday as troubles at Credit Suisse sparked fears that banking turmoil is spreading around the world.
On Thursday morning, Japan’s Topix Banks Index, a key index that tracks Japanese lenders, tumbled as much as 6.4%. It then trimmed some losses and was last trading 4.3% lower. The index has lost more than 8% so far this week.
In South Korea, major lenders Shinhan Financial Group and KB Financial Group declined 1.7% and 0.7% respectively.
Japan’s benchmark Nikkei 225 was down as much as 2.2% in early trade. It was last trading 1.2% lower. Korea’s Kospi fell as much as 1.4%, but then reversed all losses and was trading flat.
The Korean won weakened sharply against the US dollar, down nearly 1% in morning trading, as investors piled into traditional safe-haven currencies such as the greenback.
Hours after the Swiss central bank said on Wednesday it was ready to provide financial support to Credit Suisse, the beleaguered megabank took it up on the offer, hoping to reassure investors that it had the necessary cash to stay afloat.
Credit Suisse said it would borrow up to 50 billion Swiss Francs ($53.7 billion) from the Swiss National Bank. The bank called the loan a “decisive action to pre-emptively strengthen its liquidity.”
Banking shares were hammered in Europe and New York on Wednesday after shares in Credit Suisse fell as much as 30%, which rattled investors already reeling from the rapid collapse of two US banks within a week.