Market turmoil calms after Credit Suisse gets £45bn loan

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On Thursday’s top stocks faced a rollercoaster session, with traders sending the FTSE 100 up and down throughout the day, but it managed to close higher despite turbulent trading.

Thursday’s trading was highly uncertain, following the index’s worst day for three years on Wednesday amid concerns over the future of banking giant Credit Suisse.

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The top-tier index initially gained ground, looking for a rebound as trading resumed after Swiss authorities granted a £45bn emergency loan to a stressed bank.

But it was knocked like a yo-yo throughout the day, at one point even falling into negative territory. It had gained 0.9% by the end of the day.

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In the US, just days after the collapses of Silicon Valley Bank and Signature Bank, the deepening crisis at Credit Suisse has given rise to fears that the banking sector is heading towards a full-scale crisis.

Credit Suisse said it would borrow up to 50 billion Swiss francs (£45 billion) from Switzerland’s central bank to shore up its finances.

After such a heavy loss yesterday, this morning’s lead is very small

The loan was aimed at boosting its liquidity and calming investors, a day after the bank’s share price plunged 24%.

But its shares gained nearly 19% in Zurich and some of the ground lost on Wednesday in European and US indices but buoyed by broader markets.

But experts said the rebound was “tremendous” and the market would remain volatile.

Chancellor Jeremy Hunt said he welcomed Credit Suisse’s efforts to boost liquidity.

He told Times Radio: “I monitor what’s going on in the markets, the governor of the Bank of England carefully monitors what’s happening, he informs me.

“I think the news we’ve heard from the Swiss authorities overnight is welcome.”

Earlier, he told Sky News that developments in Switzerland were “encouraging”.

The Bank of England is said to be holding emergency talks with its global central banking counterparts last night as the crisis deepens, and is reportedly in contact with both Credit Suisse and the Swiss National Bank regarding emergency loans.

But Neil Wilson, chief market analyst at Finalto, said: “After such a heavy loss yesterday, gains this morning are quite modest – that’s not to say they won’t pick up later, a lot depends on Credit Suisse sentiment and the European Central Bank. Bank later.

Traders will be closely watching the latest interest rate decision by the European Central Bank on Thursday, which is expected to dampen any hikes due to market volatility.

Susannah Streeter, head of wealth and markets at Hargreaves Lansdowne, said: “As investors await that decision, trading is expected to remain volatile.

“If policymakers decide to do another major monetary policy easing, the initial market reaction may be one of relief, but then concerns about the insidious effects of inflation and whether price spiral risks spiraling out of control.” Likely to rise again. Again.”

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