US regional banks' bad loan shock… European markets shaken after New York

Source

Korea Economic Daily

Summary

It reported that concerns over bad loans at US regional banks have spread, shocking New York and European markets.
It stated that major financial stocks such as Citigroup recorded large declines, and high-valuation quantum computing and nuclear-related stocks also plunged.
It reported that worsening investor sentiment has also led index futures to decline, and the market is on edge over whether the distress will have widespread effects.

Financial stocks broadly shocked… Citi 3.5%↓

Worsening investor sentiment… High-valuation stocks plunge

Watchful for whether the bad-loan impact will spread across the board

Concerns over bad loans at US regional banks emerged, shocking European markets following New York.

On the 16th (local time), the Dow Jones Industrial Average fell 0.65%, the S&P 500 fell 0.63%, and the Nasdaq fell 0.47%. That day, New York markets opened higher on TSMC's strong earnings announcement, but reversed into decline during the session when news of increasing regional bank bad loans spread. The Nasdaq rose as much as 0.96% intraday before widening its loss to -1.17%, showing extreme volatility.

The financial sector could not avoid declines either. Citigroup fell 3.53%, and JPMorgan Chase (-2.34%), Goldman Sachs (-1.28%) also fell. The KBW ETF, a US bank exchange-traded fund (ETF), plunged 3.64% that day.

Stocks related to quantum computers and nuclear power, which had recently been on a sharp rise, also suffered large declines. NuScale Power, a nuclear power stock, plunged more than 10%, and Rigetti Computing, regarded as a leading quantum computing stock, fell 14.86%. A chief executive of an asset management firm explained, "Investor sentiment has worsened due to bad loans at regional banks, causing money to come out first from high-valuation quantum computing and nuclear-related stocks."

Futures on New York stock indexes were also down on the 17th. As of 6 a.m. ET, S&P 500 futures and Nasdaq futures were down more than 1%, and Dow futures were down nearly 0.8%.

Shocks also hit European markets that opened on the 17th. The pan-European STOXX 600 and the UK FTSE index were down around 1.5% as of 7 p.m. KST that day, and Germany's DAX fell more than 2%. US CNBC reported, "Concerns about distress in the US banking sector had an impact."

Reporter Mansu Choi bebop@hankyung.com