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Global markets are mixed as Credit Suisse accepts a $54 billion lifeline

HONG KONG/LONDON (CNN) European markets breathed a sigh of relief on Thursday as struggling lender Credit Suisse accepted a loan from the Swiss central bank, but investors in Asia were still worried about the turmoil that has hit the global banking sector in recent days have.

Europe’s benchmark index, the Stoxx Europe 600 Banks, which tracks 42 major EU and UK banks, was up 1% in morning trade. The wider Stoxx Europe 600 (XXL) Index up 0.37% as London was bank-heavy FTSE100 (UKX) was up 1%.

of Germany DAX (DAX) and France CAK 40 (CAC40) increased by 0.64% and 0.90% respectively.

Investors were emboldened by Credit Suisse’s announcement that it would borrow up to 50 billion Swiss francs ($53.7 billion) offered by the Swiss National Bank to “preventively bolster its liquidity”.

Markets are eagerly awaiting the European Central Bank’s (ECB) rate decision due on Thursday. It was widely expected that interest rates would be raised by half a percentage point, but this week’s market crisis could force a rethink.

U.S. stocks were mixed in premarket trading, with Dow futures down 0.33% and S&P 500 futures down 0.24%, while Nasdaq futures were up 0.14%.

Investors in Asia were more pessimistic. Bank stocks in the region fell on Thursday, dragging broader markets lower.

But news that Credit Suisse had accepted an offer of financial support from the Swiss central bank limited losses. Investors on Wednesday had caused the shares of Switzerland’s second largest lender to fall by up to 30%.

The Topix Banks Index of Japan, a major index that tracks Japanese lenders, fell as much as 6.4% in the morning session. It then pared some losses to close 3.26% lower. The index is down 7.4% so far this week.

in Hong Kong, Standard Chartered (SCBFF) closed up 5.4%. HSBC holdings (HSBCPRA) ended the day 2.4% lower. Local bank BOC Hong Kong ended the day down 3.9%.

In South Korea, major lenders Shinhan Financial Group and KB Financial Group fell 2.8% and 1.9%, respectively.

“What we’re seeing is a significant drop in investor confidence in both the technology and banking sectors,” said Clifford Bennett, chief economist at ACY Securities, a Sydney-based online brokerage. “It is highly unlikely that these concerns will simply go away anytime soon.”

“Regardless of balance sheets, a loss of investor and depositor confidence can bring down any bank,” he added.

Japan’s broad benchmark Nike 225 (N225) ended the day 0.8% lower. Hong Kong hang seng (HSI) 1.7% lost. of China Shanghai composition (SHCOMP) fell by 1.1%.

Koreas kospi (COSPI) fell as much as 1.4% but then recouped all losses to finish down 0.08%.

Bank stocks were hammered in Europe and New York on Wednesday Credit Suisse shares fell to a new all-time low as investors reeled from the rapid collapse of two US banks within a week.

The bank failures had already forced US regulators on Sunday to take emergency measures to protect deposits at both lenders: Silicon Valley Bank and Signature Bank.

“Markets could become chaotic amid the fallout from the Silicon Valley bank collapse, coupled with ongoing uncertainty about the future trajectory of the global economy and interest rates,” said Marty Dropkin, head of equities for Asia Pacific at Fidelity International.

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