LONDON: Asian and European stock markets mostly rose Tuesday, as fears of a banking crisis eased further.
World oil prices also advanced as demand jitters receded, while the dollar sagged versus the euro and yen.
“Stocks are trying to find a new equilibrium as bank stresses ease,” noted SPI Asset Management analyst Stephen Innes.
European equities rebound on SVB sale
Most equity markets had advanced Monday as banks shares jumped after US lender First Citizens bought most of collapsed rival Silicon Valley Bank (SVB).
The gains followed last week’s rout over concerns that the turmoil in the sector – which sparked the UBS takeover of Credit Suisse – could hit other major institutions, such as German giant Deutsche Bank.
‘All about confidence’
Investors hope “the banking crisis which has bedevilled the markets for much of March might be starting to ease”, said Russ Mould, investment director at stockbroker AJ Bell.
“It’s all about confidence right now – and anything which reassures shareholders, creditors and depositors that their money is safe with the banks is one step further away from the carnage which claimed SVB and Credit Suisse.”
And while markets have responded positively to the measures implemented by authorities to shore up the commercial banking sector, there are still concerns about the impact of ongoing rate hikes by central banks, especially the US Federal Reserve.
Despite the recent turmoil, many central banks have pushed on with monetary tightening as they focus on fighting inflation.
Bank of England governor Andrew Bailey, whose institution ramped up interest rates last week, sounded a note of caution over banking-sector upheaval.
“We are very vigilant. We are in a period of tension, tightness and alertness,” he told a parliamentary committee on Tuesday.
He added: “My very strong view about the UK banking system is that it is in a strong position, both capital and liquidity wise. It is not showing signs of problems in that respect and we have tested very extensively.”
Key figures around 1140 GMT
London - FTSE 100: UP 0.2 percent at 7,489.47 points
Frankfurt - DAX: UP 0.2 percent at 15,160.07
Paris - CAC 40: UP 0.3 percent at 7,096.21
EURO STOXX 50: UP 0.2 percent at 4,174.09
Tokyo - Nikkei 225: UP 0.2 percent at 27,518.25 (close)
Hong Kong - Hang Seng Index: UP 1.1 percent at 19,784.65 (close)
Shanghai - Composite: DOWN 0.2 percent at 3,245.38 (close)
New York - Dow: UP 0.6 percent at 32,432.08 (close)
Euro/dollar: UP at $1.0825 from $1.0803 on Monday
Pound/dollar: UP at $1.2298 from $1.2289
Euro/pound: UP at 88.03 pence from 87.88 pence
Dollar/yen: DOWN at 131.00 yen from 131.56 yen
Brent North Sea crude: UP 0.6 percent at $78.55 per barrel
West Texas Intermediate: UP 0.6 percent at $73.22 per barrel
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