Australian investors are bracing for the risk of deeper fallout from the second-biggest bank failure in US history.
Australian investors are bracing for the risk of deeper fallout from the second-biggest bank failure in US history, with the local sharemarket tipped to open lower amid concerns the collapse could hit confidence in banks or foreshadow other stresses in the economy.
AMP chief economist Shane Oliver said the expected 0.5 per cent fall implied by ASX futures was “probably an understatement” as steeper declines in the US suggested Australia may have a “bit of catching up to do”.While tech-focused Silicon Valley Bank’s collapse may be a symptom of specific economic weakness in the embattled technology sector, Oliver said some investors were worried it could be the “canary in the coal mine” for hidden pressures elsewhere inflicted by rising interest rates.
Commonwealth Bank of Australia shares slid 3.2 per cent on Friday, National Australia Bank was down 3 per cent, while Westpac and ANZ each lost 2.6 per cent. Australian banks on Sunday were assessing if they had any indirect financial exposure to Silicon Valley Bank, before determining if they needed to notify the stock market.Dive said he would be shocked if any major Australian bank had a significant exposure to the collapse, as they were well-diversified and had largely pulled back from much of their more exotic, offshore activities.
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