PARIS (Reuters) – The main European stock markets are up in early trading on Friday, thanks to initiatives taken in Europe and the United States to dispel fears of a possible crisis in the banking sector.
In Paris, the CAC 40 gained 0.63% to 7,069.98 points at 08:57 GMT. In London, the FTSE 100 takes 1.13% and in Frankfurt, the Dax advances by 0.69%.
The EuroStoxx 50 index is up 0.87%, the FTSEurofirst 300 0.97% and the Stoxx 600 0.8%.
The latter lost nearly 1.7% over the week, like the CAC 40, due to fears for the global banking system following the fall of several American establishments and the setbacks of Credit Suisse.
After the financial support provided to the Swiss bank for the Swiss central bank, 11 major American banks, including JPMorgan, agreed to inject 30 billion dollars into the coffers of First Republic Bank, in difficulty after the bankruptcy of SVB, Silvergate and Signature.
In transactions before the opening of Wall Street, First Republic was however down, a sign that concerns persist about this regional bank.
The European Central Bank decided on Thursday to raise rates by half a point, as it had previously announced, thus sending a “message of confidence” on the robustness of banks, said the governor of the Bank of France François Villeroy de Galhau.
Goldman Sachs now sees the deposit rate, currently at 3.0%, peak at 3.5% while the US bank previously expected a peak at 3.75%.
Although the institution refrained from providing any indication on the future trajectory of its rates, Peter Kazimir, the governor of the Slovak central bank, estimated that the ECB should continue to raise its interest rates because of the tenacity of underlying inflation.
On the stock market, the Stoxx banking index posted one of the best performances with a gain of 1.37%. Societe Generale, also taking advantage of HSBC’s move to “purchase”, climbed 3.11%.
JPMorgan maintains a cautious view on European banks. Given heightened liquidity and funding concerns, the bank believes that the focus should be on the risks associated with tighter monetary policy and no longer on the positive effect of higher rates for banks.
(Laetitia Volga, editing by Kate Entringer)
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