New Telegraph

European markets recover on a wild day for bank stocks

European markets ticked up Monday but bank stocks were mixed and volatile as investors assessed the significance of the nearcollapse of Credit Suisse, one of the world’s most important financial institutions. Europe’s benchmark Stoxx Europe 600 (SXXL) index was up one per cent, while Germany’s DAX (DAX) and France’s CAC 40 (CAC40) rose one per cent and 1.4 per cent respectively, recovering from losses earlier in the day. London’s bank-heavy FTSE 100 (UKX) was 0.8 per cent higher. The Stoxx Europe 600 Banks index, which tracks 42 big EU and UK banks, was 0.9 per cent up. On Sunday, UBS (UBS) agreed to take over rival Credit Suisse (CS) in an emergency rescue deal.

That was followed a few hours later by a coordinated move by major central banks to boost the flow of US dollars through financial markets. “So far it looks as though those efforts have not been in vain, along with those of a selection of major central banks to ensure access to dollar funding continues,” said Craig Erlam, senior UK and European market analyst at OANDA. “This is now the second weekend that central banks, governments, and regulators have spent putting out fires, and, while markets are recovering today, I’m not sure anyone is confident that all flames have been extinguished.” Swiss-listed shares in UBS rose two per cent Monday afternoon. Earlier in the session the stock had fallen as much as 15 per cent, along with a broader fall in the European banking sector. Credit Suisse shares were 56 per cent in the red, broadly in line with the value of the $3.25 billion offer from UBS. Deutsche Bank (DB) and Societe Generale (SCGLF) shares slipped, while other big European lenders strengthened.

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