US stocks slumped Monday with key indices markedly lower amid worries over the banking system following the collapse of Silicon Valley Bank and shuttering of Signature Bank.
Shares of First Republic Bank plunged more than 65 percent as trading started, leading the decline among banks as regional lenders face pressure.
Apart from First Republic, shares of other regional banks, including Western Alliance Bancorp and Zions Bancorporation, also plummeted.
Around 20 minutes into trading, the Dow Jones Industrial Average, which slipped 0.7 percent initially, picked up slightly.
But the broad-based S&P 500 remained 0.4 percent down while the tech-heavy Nasdaq Composite Index lost 0.3 percent.
This came despite US finance authorities announcing a rescue plan Sunday to ensure that depositors at the failed SVB will be able to fully retrieve their funds.
The Fed announced it would make extra funding available to banks to help them meet the needs of depositors, which would include withdrawals.
“Confidence is eroding in the market. We’re seeing it particularly obviously in the regional banks,” said Quincy Krosby of LPL Financial, adding the same phenomenon could be seen in Europe.
While US authorities are trying to shore up confidence, “it doesn’t look as if it’s working,” she added.