Australian share market bloodbath after Credit Suisse stocks plunged 24 per cent

Australian shares have plunged with the banks taking a tumble as financial markets worry about the possible collapse of Swiss bank Credit Suisse sparking a new GFC.

The Australian Securities Exchange’s benchmark S&P/ASX200 was down 1.7 per cent during the first 90 minutes of trade on Thursday morning.

This occurred after Credit Suisse shares plummeted by 24 per cent after a key investor refused to up its stake in the embattled Swiss bank. 

Saxo market strategist Jessica Amir said financial markets were worried about a rerun of the Global Financial Crisis in 2008 when banks stopped lending to each other, sparking a liquidity or credit crunch.

‘We think that it could potentially be, it’s basically stirring up messages of a potential Lehman Brothers moment,’ she told Daily Mail Australia.

‘Stepping back, big picture, is that what is happening is interbank markets, there’s a liquidity dry-up there and this is a major concern.’ 

Australian shares have plunged with the banks taken a tumble as financial markets worry about the possible collapse of Swiss bank Credit Suisse

While Australian banks are well capitalised, they were bleeding with Westpac shares down 2.2 per cent to $21.18.

This was more severe than the 1.7 per cent drop in the S&P/ASX200 that took it back down to 6,947.90 points.

Credit Suisse’s woes are occurring just days after the collapse of the American Silicon Valley Bank and the Signature Bank. 

Saudi National Bank, which holds a 9.88 stake in Credit Suisse, has declined to increase its stake.