by Diana Mandia
(Reuters) – European stocks ended higher on Monday, buoyed by renewed optimism about the banking sector after the turmoil of recent weeks linked to the setbacks of Credit Suisse and, by extension, Deutsche Bank.
In Paris, the CAC 40 ended up 0.9% at 7,078.27 points. The British Footsie gained 0.9% and the German Dax 1.14%.
The EuroStoxx 50 index gains 0.85%, the FTSEurofirst 300 1.09% and the Stoxx 600 1.1%.
Statements deemed reassuring by European and American authorities on the financial sector, cheap purchases and Monday’s announcement of the takeover of deposits and loans from Silicon Valley Bank by First Citizens BancShares came to relieve the markets.
The sudden collapse of US bank SVB earlier this month triggered the worst banking shock since the 2008 global financial crisis, followed soon after in Europe by Credit Suisse – subsequently acquired by rival UBBS – and battered Deutsche Bank Friday on the stock market because of the increase in its cost of insurance against a risk of default.
The title of the first German bank regained some calm on Monday and, with it, the big names in the sector in Europe, which had tumbled Friday in its wake.
European Banking Authority (EBA) President Jose Manuel Campa, however, said in an interview published on Monday by the German daily Handelsblatt that the banking sector remained very vulnerable, even after the measures taken to contain the recent crises, while pointing out that the rise in interest rates continued to weigh on the financial markets.
The European banking compartment, which lost 3.78% on Friday and recorded a third week of decline, resumed 1.53% on Monday with Deutsche Bank (+6.1%), UBS (+1%), BNP Paribas (+ 2.6%) and Societe Generale (+0.3%).
In health (+1.96%), the Swiss group Novartis jumped 7.7% after the promising results of a treatment against breast cancer.
Orange took 2% on the back of Morgan Stanley’s recommendation to “overweight”, while Renault (+2.9%) benefited from HSBC’s advice to “buy”.
At the bottom of the SBF 120, Orpea dropped 8.9% after the announcement of an accelerated safeguard procedure as part of a restructuring plan which should result in significant dilution for current shareholders.
Values exposed to China such as Pernod Ricard (-1.3%) or the mining group Rio Tinto RIO.L (-0.4%) ended in the red after the publication of data showing that the decline in group profits manufacturing in China intensified over the first two months of the year.
AT WALL STREET
At the time of the close in Europe, the Dow Jones gained 0.55%, the Standard & Poor’s 500 0.23%, while the Nasdaq went into negative territory (-0.30%).
First Citizens shares jumped 47.2% after the announcement of the takeover of SVB by the North Carolina-based bank.
THE INDICATORS OF THE DAY
The business climate in Germany improved in March compared to February, according to the monthly survey by the institute for economic studies Ifo published on Monday, which removes the specter of a recession this winter in the first economy of Germany. ‘Europe.
Data released by the European Central Bank (ECB) on Monday, however, showed euro zone business loan growth slowed in February for the fourth straight month, driven by the economic slowdown and rapid rate hikes.
Meanwhile, Pablo Hernandez de Cos, member of the European Central Bank (ECB), said on Monday that the future path of interest rates would depend on new economic and financial data as well as the evolution of underlying inflation. .
On the foreign exchange market, the dollar is more or less stable (-0.14%) against a basket of reference currencies, traders digesting the latest announcements from the authorities on the banking sector.
The euro rises 0.19% and is trading at $1.0781.
The yen, which benefited from its status as a safe haven asset on Friday, rising to 129.65 yen for the dollar, is trading on Monday at 131.53 with the renewed appetite for risk.
Yields on government bonds, which fell sharply on Friday, rose as fears around banks eased and ahead of the Treasury Department’s sale of short- and medium-term debt. The yield on two-year Treasuries rose 17 basis points to 3.95%, while its German equivalent ended up slightly up 0.2 points to 2.521%. The yield on ten-year US Treasury bills rose for its part more than 11 basis points to 3.4922%.
That of the ten-year German Bund gained 0.1 basis point to 2.228%.
Oil prices rose on Monday as oil exports from Iraqi Kurdistan via Turkey ceased and worries in the banking sector eased.
Brent LCOc1 advanced 1.81% to 76.35 dollars a barrel and US light crude (West Texas Intermediate, WTI) CLc1 2.19% to 70.78 dollars.
TO FOLLOW TUESDAY:
(Written by Diana Mandia)
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.