The sell-off comes as traders nervously await the release of US jobs data later in the day, with many fearing a forecast-beating figure could press the Federal Reserve to ramp up borrowing costs more than previously thought.
In a bid to prevent a run on the bank, SVB CEO Greg Becker asked clients to stay calm during a conference call Thursday, Bloomberg News reported, citing someone familiar with the matter. Data showing more people than expected made jobless claims last week -- indicating a softening of the labour market -- was unable to soothe investor worries, and all three main indexes were deep in the red by the close of trade in New York.While higher borrowing costs can be beneficial for banks, many that took out loans and made other investments during the period of ultra-low rates have seen their value erased as the Fed tightens monetary policy to fight inflation.
And SPI Asset Management's Stephen Innes said:"In days like this, 'bad news is indeed bad news', especially when the potential of massive mortgage defaults enters the market purview. Hong Kong's Hang Seng Index fell three percent -- wiping out all the year's gains -- while Sydney shed more than two percent.
London opened sharply lower even as data showed the UK economy rebounded in January to grow 0.3 percent, having narrowly avoided a recession in the last quarter of 2022. Paris and Frankfurt were also sharply down.
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