Silicon valley bank has suspended trading after sparking stock market meltdown

Key Highlights :

1. Silicon Valley Bank (SVB), which lends to technology start-ups, has suspended trading in its shares and is reportedly in discussions to sell itself after failing to raise enough money to stay afloat.

2. SVB revealed it had realised $1.8bn in losses on US bonds and was being forced to issue $2.25bn in shares to bolster its finances.

3. The news sparked a crisis in confidence in the banking sector around the world, causing a global stock market selloff.

4. The FTSE 100 in London dropped as much as 1.9%, while the FTSE 250 plummeted as much as 2.1%.

5. The panic over SVB's troubles also affected the technology fund that counts the banking app Revolut among its investments, whose shares plunged almost a fifth.

6. The pound rose 1.5% against the dollar and 0.5% against the euro after the Office for National Statistics said the UK's economy expanded 0.3% in January.

7. The US jobs report showed wage growth decreased in February, easing fears of an aggressive rate rise by the Federal Reserve and causing Wall Street to turn positive in pre-market trading. However, the larger-than-expected increase in payrolls potentially gave US Federal Reserve policymakers a headache on the future path of interest rates.

Silicon Valley Bank (SVB), a lender to technology start-ups, has recently announced that it has suspended trading in its shares and is reportedly in discussions to sell itself after failing to raise enough money to stay afloat. The news has sent shockwaves across the banking industry and caused a global stock market selloff.

In a recent announcement, SVB revealed that it had realized $1.8 billion in losses on US bonds and was being forced to issue $2.25 billion in shares to bolster its finances. This announcement has sparked a crisis in confidence in the banking sector around the world, causing panic among investors and causing global stock markets to plummet.

The FTSE 100 in London dropped as much as 1.9%, while the FTSE 250 plummeted as much as 2.1%, indicating the extent of the impact of SVB's troubles on the global economy. The panic over SVB's troubles also affected the technology fund that counts the banking app Revolut among its investments, whose shares plunged almost a fifth.

Despite the bleak news, there were some silver linings for the global economy. The pound rose 1.5% against the dollar and 0.5% against the euro after the Office for National Statistics said the UK's economy expanded 0.3% in January. This positive news provided some respite to investors and raised hopes of a possible recovery in the future.

In the US, the jobs report showed wage growth decreased in February, easing fears of an aggressive rate rise by the Federal Reserve and causing Wall Street to turn positive in pre-market trading. However, the larger-than-expected increase in payrolls potentially gave US Federal Reserve policymakers a headache on the future path of interest rates.

In conclusion, the recent news about SVB has caused a global panic in the banking sector and triggered a major selloff in the stock markets. The impact of SVB's troubles on the global economy is significant, but there are some positive signs for the future, such as the UK's economy expanding in January. However, the news highlights the need for caution and prudence in the financial sector and the importance of maintaining strong financial fundamentals to prevent similar crises in the future.

Continue Reading at Source : telegraph