DThe backing of the Swiss central bank (SNB) for Credit Suisse (CS), which is fighting a crisis of confidence, brought relief to the German stock market on Thursday. A few hours before the interest rate decision by the European Central Bank (ECB), the Dax rose by 1.6 percent to 14,982 points after losing more than three percent on Wednesday. Bank shares went on a recovery course: Deutsche Bank rose by more than five percent, Commerzbank increased by more than four percent.
The second largest Swiss bank wants to take out loans of up to CHF 50 billion from the central bank. It also wants to buy back its own debt. CS shares rose by around 30 percent in Zurich. The fear of further bank failures worldwide after the collapse of the US institutes Silicon Valley Bank (SVB) and Signature Bank is still there, stockbrokers warned.
“The German stock market is now that famous falling knife that stock market wisdom says investors should never grab,” said Jochen Stanzl, chief market analyst at broker CMC Markets. “You can see that the problems of the banks are due to the sharp rise in interest rates, but the easy-sounding solution of falling interest rates again is not because of the high inflation.”
Investors will therefore scrutinize the ECB’s signals with eagle eyes. Expectations of a major interest rate hike by the ECB of 50 basis points have fallen significantly as a result of the turbulence on the money markets. The recent bank difficulties have opened the door for an increase of just 25 basis points, said portfolio manager Thomas Altmann from asset manager QC Partners.