European stocks closed sharply higher on Tuesday amid easing concerns about the health of the banking sector following the efforts by governments and central banks to rescue distressed banks in the U.S. and Europe.
Assurances by ECB President Christine Lagarde and U.S. Treasury Secretary Janet Yellen about capital and liquidty levels of the banks helped as well.
Investors looked ahead to the Federal Reserve’s monetary policy announcement. The Fed is widely expected to raise interest rate by 25 basis points on Wednesday.
The pan European Stoxx 600 climbed 1.36%. The U.K.’s FTSE 100 gained 1.82%, Germany’s DAX surged 1.75% and France’s CAC 40 gained 1.42%, while Switzerland’s SMI advanced 1.4%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Spain and Sweden closed with strong gains.
Turkiye ended sharply lower, while Russia settled flat.
Bank stocks were among the prominent gainers as fears of a widespread contagion risk eased after the takeover of Credit Suisse.
Shares of automakers were in demand after data showed an increase in car registrations in February.
In the UK market, Rolls-Royce Holdings rallied nearly 6.5%. Natwest Group, Prudential, Ashtead Group, Barclays, Standard Chartered, Lloyds Banking Group, Flutter Entertainment and Sainsbury (J) gained 4 to 6%.
Schrodders, Burberry Group, Melrose Industries, ABRDN, Weir Group, Next, Whitbread, BP, Shell, JD Sports Fashion, Beazley, IAG, 3i Group, M&G and Legal & General surged 3 to 4%.
Fresnillo and Endeavour Mining both ended lower by nearly 4%. Kingfisher, Severn Trent, United Utilities, Segro, National Grid and Pearson lost 1 to 1.4%.
In the German market, Commerzbank climbed more than 7%. Deutsche Bank surged nearly 6%. Puma, HeidelbergCement, Siemens, Allianz, Continental, Henkel, MTU Aero Engines, Fresenius, Volkswagen, Fresenius Medical Care, Munich RE, Merck and Brenntag gained 2 to 4%.
Symrise, Vonovia, Siemens Healthineers and E.ON closed weak.
In Paris, AXA, Societe Generale, BNP Paribas, WorldLine, Alstom, Renault and ArcelorMittal ended stronger by 3.3 to 4.3%.
Safran, Airbus Group, Vinci, Saint Gobain, Stellantis, Kering, Credit Agricole, Vivendi, Engie, Veolia and TotalEnergies also ended with sharp gains.
In the Swiss market, Credit Suisse shares surged more than 7% after plunging 55% in the previous session. UBS soared more than 12%.
On Sunday, UBS agreed to take over the Credit Suisse in an all-share deal worth $3.25 billion under pressure from the Swiss authorities.
In economic news, The UK budget deficit widened to its highest February level due to the substantial spending on energy support schemes, the Office for National Statistics said Tuesday.
Public sector net borrowing excluding banks increased by GBP 9.7 billion from the last year to GBP 16.7 billion in February. This was the highest February borrowing since records began in 1993.
In the financial year-to-February, the public sector borrowed GBP 132.2 billion, which was GBP 15.5 billion more than in the same period last year.
Switzerland’s exports decreased for the first time in three months in February, falling by a real 2.7% month-on-month, data from the Federal Customs Administration showed. Exports rose 2.6% in January.
Imports dropped by 0.5% over the month, in contrast to a 0.1 percent slight gain in January.
Eurozone construction output rose 3.9% month-on-month in January, reversing a 2.3% fall in the previous month, data from Eurostat showed. Further, the latest rate of expansion was the fastest since March 2021, when output had grown 4.2%.
German economic confidence declined sharply in March reflecting the turmoil in the global financial markets, a closely-watched survey showed.
The ZEW Indicator of Economic Sentiment declined to 13.0 in March from 28.1 in February, the Mannheim-based think tank said.
European new passenger car registrations continued to strengthen in February albeit due to the low base of comparison given the semiconductor shortage crisis at the beginning of 2022, data from the Brussels-based European Automobile Manufacturers’ Association, or ACEA, showed.
Passenger car sales increased 11.5% on a yearly basis to 802,763 units in February. This followed an 11.3% rise in January.
Market Analysis
European Stocks Close Sharply Higher As Rescue Efforts Help Ease Concerns About Banking Crisis
2023-03-21 17:25:17
