Market: Europe ends up slightly, optimism on banks fades


by Diana Mandia

(Reuters) – European stock markets ended a volatile session up on Tuesday, marked by the slowing of the rebound in the banking sector and the rise in bond yields.

In Paris, the CAC 40 ended with a gain of 0.14% to 7,088.34 points. The British Footsie advanced 0.17% and the German Dax 0.09%.

The EuroStoxx 50 index gained 0.09% and the FTSEurofirst 300 0.03%, while the Stoxx 600 lost 0.06%.

While immediate concerns about the banking sector eased following the announcement of US regulators’ support for First Citizens Bank’s proposed acquisition of Silicon Valley Bank (SVB) deposits and loans, consumer confidence investors in the sector remains fragile.

The Chairman of the Supervisory Board of the European Central Bank (ECB), Andrea Enria, said Tuesday that he was worried about the recent volatility in Deutsche Bank’s share price and the nervousness of investors.

The cost of default risk insurance (CDS) at Germany’s biggest bank has fallen since tensions peaked on Friday, but remains well above levels before the collapse of SVB and the takeover of Credit Suisse by its rival, which triggered all the alarms this month about a possible banking crisis.

The Governor of the Bank of Spain, Pablo Hernandez de Cos, for his part, warned that the uncertainty caused by the turbulence in the sector could generate a persistent increase in funding costs and force banks to increase their provisions.

VALUES

The European banking compartment, which gained up to 2% in morning trading, reduced its gains and ended up 0.55%.

In addition to concerns about the health of banks, investors also learned on Tuesday that searches were carried out by the French National Financial Prosecutor’s Office (PNF) at the premises of five establishments, including Société Générale SOGN.PA (-1.07%) ) and BNP Paribas (+0.3%), as part of an investigation into tax evasion and laundering of tax evasion.

Among the major sectors of the European listing, compartments sensitive to interest rates such as new technologies (-1.34%) and real estate (-2.73%) suffered the largest declines against a backdrop of rising prices. bond yields.

In stocks, the operator Telecom Italia granted itself 2.5% as contenders for the takeover of its fixed network study potential improvements to their offers after receiving additional information on the asset, sources said on Tuesday. at Reuters.

AT WALL STREET

At the time of the close in Europe, the Dow Jones gained 0.18%, while the Standard & Poor’s 500 and the Nasdaq fell 0.16% and 0.65%.

THE INDICATORS OF THE DAY

In France, the business climate in industry fell to 104 points in March against 105 last month, while remaining above estimates of 103 points, according to the monthly business survey published Tuesday by INSEE.

With inflation still being watched closely by investors, prices at grocery stores in Britain rose again in March to a record high, according to industry data released on Tuesday.

In the United States, the Conference Board’s monthly survey reported an unexpected improvement in consumer confidence on Tuesday.

CHANGES

The lull in banks is curbing risk aversion and the dollar is losing ground for the second consecutive session, falling 0.37% against a basket of benchmark currencies.

The euro took advantage of this to rise to 1.0847 dollars (+0.44%).

RATE

The easing of concerns in the banking sector is supporting the rise in bond yields, the German ten having taken more than six basis points on Tuesday to 2.288%.

In the United States, the yield on Treasuries with the same maturity rose by more than three points, to 3.56%.

OIL

Oil prices advanced on Tuesday as investors weighed bank-related risks, the consequences of disruptions to crude oil exports from Iraqi Kurdistan and signs of rising demand from China.

Brent rose 1% to 78.9 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.95% to 73.5 dollars a barrel.

TO BE FOLLOWED ON WEDNESDAY:

(Edited by Blandine Hénault)

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