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.’ 

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.