(Paris) Emergency measures over the weekend to ease fears over Credit Suisse and strain on the banking system allowed stock markets to rebound a little on Monday after heavy losses last week, but pressure persists on some banks.
After opening in the red, the European indices recovered around 9:45 a.m. (Eastern time) in Paris (0.94%), London (0.40%), Milan (0.94%), Frankfurt (0 .68%).
Wall Street opened mixed, with the Dow Jones up 0.61% and the S up 0.15%.
In sharp decline at the start of the session, the financial sector is now up 0.77% on the Stoxx600 banking index. Some European banks have yet to recover all of their initial losses for the session, such as Societe Generale (-0.94%) and ING (-2.32%), but others are progressing such as Unicredit (1.17%) or BNP Paribas (0.38%).
On the other hand, in the United States, the First Republic bank, the most rowdy last week, plunged another 13% in the first trade of the session on Wall Street. On the other hand, the shares of the major American banking institutions rose, like those of other regional banks concentrating the fears of investors, for example Western Alliance (6.74%).
Credit Suisse’s stock is trading a bit higher than its UBS takeover price, though that’s still a drop of more than 56% from its Friday closing price. UBS rallied 2.83% after falling more than 10% in early trading.
“Investors are still struggling to assess the situation of financial stocks” and remain suspended from the meeting of the American central bank on Tuesday and Wednesday, comments Pierre Veyret, analyst at ActivTrades.
“ Confidence always plays a major role in banking crises […] This time, the public authorities clearly intend to act quickly and strongly ”, explains Gilles Moëc, chief economist of Axa IM.
After intense negotiations over the weekend, Switzerland’s leading banking group UBS agreed on Sunday to buy struggling rival Credit Suisse for a pittance, with substantial guarantees from the Swiss government and cash from the SNB. , the Swiss central bank.
To calm banking stress, official statements were released on Monday morning by European, German, British and Italian financial authorities… “The European banking sector is resilient, with solid levels of capital and liquidity”, underlines the European Central Bank ( ECB) in a joint statement issued with the European Banking Resolution Mechanism (SRB) and the European Banking Authority (EBA).
On Sunday, the American (Fed), European, Swiss, British, Canadian and Japanese central banks said they were taking coordinated action to improve access to liquidity. An exceptional measure to restore confidence in the financial system, shaken for ten days by the bankruptcy of the American establishment Silicon Valley Bank (SVB).
But “the more policymakers act, the more bad news investors expect, which creates a horribly negative feedback loop, as if investors are wondering, ‘what do they know that we don’t know?’ “,” said Stephen Innes of SPI Asset Management.
Propelled by mounting concerns over the banking sector, the price of gold rose above the symbolic threshold of $2,000 an ounce on Monday, but has since fallen again. By 9:30 a.m. EST, the yellow metal was down 0.45% to $1,980.
On the bond market, borrowing rates for European countries and the United States stabilized, a sign of relaxation among investors after their sharp drop at the start of the session.
The euro gained 0.49% against the dollar, to 1.0722 to the dollar, around 9:30 a.m. (Eastern time).
On the oil market, the barrel of American WTI stabilized at 66.65 dollars (-0.13%), around 9:25 a.m. (Eastern time), and the barrel of Brent from the North Sea at 72 $.99 (0.03%).
European natural gas was trading at 40.80 euros per megawatt hour, after slipping below the 40 euro threshold for the first time since July 2021.
