A wave of risk aversion swept global markets, sending gold to a record high and causing the VIX “fear index” to spike over 22%. The panic was triggered by renewed fears over the health of US regional banks.
Two lenders, Zions Bancorporation and Western Alliance, saw their shares plunge after disclosing a combined $150 million in bad loans and write-offs. This sparked fears of a domino effect, reminiscent of the 2023 SVB crisis.
Stock markets from Asia to Europe tumbled. Japan’s Nikkei and Hong Kong’s Hang Seng fell sharply. In Europe, the FTSE 100 and Germany’s Dax also dropped, with bank stocks like Barclays and Deutsche Bank leading the decline.
Analysts warned that these incidents could be the “tip of the iceberg” after a long period of high rates. The market is now grappling with deep uncertainty about the true state of credit quality.
Risk Aversion Sweeps Markets: Gold Soars, VIX Spikes
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