PARIS: European shares rose on Wednesday supported by gains in banking stocks, including UBS, which rose after naming a new CEO, while a strong outlook from chipmaker Infineon aided the mood.
The benchmark STOXX 600 index closed 1.3% higher.
UBS Group AG gained 3.7% after the Swiss bank announced that Sergio Ermotti will return to take the helm to steer the bank’s takeover of Credit Suisse.
Credit Suisse climbed 4.0%, while financial services and banking indexes rose between 1.8% and 1.9%.
“I can see why the market has stabilised and it’s true that there are some slightly comforting factors,” said Vincent Chaigneau, head of research at Generali Investments. “The Fed (bets) have been repriced down quite aggressively in the past few weeks and investor positioning is very defensive.” “But what is going to dominate is cyclical deterioration and aftershocks from the banking stress. It’s very likely that we see a credit crunch with bank lending standards tightening much further.” The benchmark STOXX 600 was headed for monthly losses, with banks set for a nearly 15% slump after the collapse of two US mid-sized lenders and the takeover of Credit Suisse fuelled concerns about the health of the banking sector.
Still, signs of economic resilience and hopes of major central banks nearing the end of their monetary tightening cycle put the STOXX 600 on course for quarterly gains.
German consumer sentiment is set to nudge up in April as energy prices have retreated somewhat from record highs, though a full recovery is not in sight anytime soon, a GfK institute survey showed.
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