(Paris) Stock markets and bank shares rebounded sharply on Monday in Europe and the United States, thanks to a series of information deemed positive by investors for the American banking sector.
European stock markets have been in the green since their opening, but have not yet made up for their losses on Friday. Around 7:45 a.m. (Eastern time), Paris rose by 1.08%, London by 0.93%, Frankfurt by 1.26% and Milan by 1.45%.
In New York, the Dow Jones is expected to open 0.68% higher, the S&P 500 0.72% and the NASDAQ 0.42%, according to their futures.
The acquisition of “all deposits and loans” of Silicon Valley Bank (SVB), which went bankrupt in early March, by the American bank First Citizens seemed to be well received by investors.
“The resolution operation seems to have been carried out quickly and suggests that the banking system is more resilient than current fears,” commented Sebastian Paris Horvitz, director of research at Banque Postale AM.
In addition, according to financial news agency Bloomberg, US authorities are considering extending an emergency lending measure for banks, which would give First Republic more time to shore up its balance sheet. What “help avoid an acute banking crisis” according to investors, notes Stephen Innes, analyst at SPI Asset Management.
In electronic trading prior to the opening of Wall Street, First Republic climbed 25% and First Citizens 34%.
In Europe, the banking sector of the broader Stoxx Europe 600 index advanced 1.50% around 7:40 a.m. (Eastern time). The shares of Deutsche Bank (+4.71%), Commerzbank (+3.20%), BNP Paribas (+2.32%) and Barclays (+2.29%) resumed color.
Other banks, such as Banco Sabadell (+0.46%), Société Générale (-0.13%) or Standard Chartered (+0.07%), were more mixed.
In Riyadh, the Saudi National Bank gleaned 0.55%, after the resignation of the president of the group, the largest shareholder of Credit Suisse before its takeover at the beginning of the month.
On the bond market, sovereign debt securities were abandoned in favor of equities. The interest rate on the 10-year German government bond, which varies inversely to the price of the bond, stood at 2.23% around 7:40 a.m. (Eastern time), against 2 .12% at Friday’s close.
Bank shares, however, remain below their level before the bankruptcy of SVB. “The Treasury, the Fed and the political powers want to be reassuring about the current banking crisis, but the data from the American Federal Reserve show strong tensions on the system”, supports Vincent Boy, analyst of IG France.
For many economists, the difficulties encountered by banks in the face of the sudden rise in interest rates will cause a tightening of bank lending conditions and risk causing the economy to slow down a little more.
More than half of a panel of US economists anticipate a recession in the United States in 2023, and almost three-quarters of them see inflation remaining above 4% until the end of the year, according to a survey by the federation of economists NABE published on Monday.
neat Novartis
Swiss pharmaceutical giant Novartis climbed 6.98% in Zurich, after reporting positive results for its drug Kisqali used in the treatment of breast cancer.
On the oil and currency markets
Oil prices rebounded on Monday. The barrel of Brent from the North Sea for delivery in May gained 1.25% to 75.93 dollars, while the barrel of American WTI at the same maturity rose by 1.20% to 70.09 dollars, around 7:40 a.m. ( Eastern time).
On the currency side, the euro gained 0.14% against the dollar at 1.0775 dollar for one euro. The Swiss franc was in demand. It was worth $1.0914, up 0.38%.