The emergency measures taken to allay fears over Credit Suisse and the strain on the banking system allowed stock markets to rebound on Monday, a movement that even included some banks.
After opening in the red, the European indices ended sharply higher in Paris (+1.27%), London (+0.93%), Milan (+1.59%) and Frankfurt (+1.12%). ). The European banking sector, down sharply at the start of the session, finally rose (+1.27%).
Wall Street also rose, by 1.15% for the Dow Jones, 0.75% for the S&P500 and 0.08% for the Nasdaq, around 5:00 p.m. GMT.
Among the biggest rises in Europe, the Swiss banking giant UBS finally gained 1.26%, after its takeover of Credit Suisse on Sunday for just over three billion euros. UBS shares had lost up to 15% of their value in the first hour of trading.
The action of Credit Suisse collapsed by 55.74%, a foreseeable fall since it brings the title of the bank in difficulty to 0.82 Swiss francs, a price close to that of its acquisition. Five years ago, the action traded around 15 euros.
“We are in a situation of crisis of confidence. This is where a central bank plays a major role” to ensure the stability of the banking system, in particular via “supplies of liquidity”, explained to the AFP Catherine Hugel, manager at Hugau Gestion.
The Swiss central bank participated with the Swiss government in taking out guarantees to convince UBS to buy out its former rival. Across Europe, financial authorities on Monday multiplied statements to reassure investors about the strength of the European banking system.
The President of the European Central Bank (ECB), Christine Lagarde, said that banks in the euro zone had financial cushions “well above requirements” and that their exposure to canceled debt securities from Credit Suisse was “very limited”.
– “A lot of uncertainties” –
However, the banks are not yet out of the woods as the losses of the Eurostoxx 600 banking index exceeded 13% last week. Several large establishments ended down again on Monday, such as Barclays (-2.29%), ING (-0.66%), Deutsche Bank (-0.50%) or Société Générale (-0.83%).
The crisis of confidence also persists with regard to the First Republic bank in the United States, the most heckled last week. It plunged 33.39% in session on Wall Street and nearly 88% since March 1, dragging down the other American regional banks, such as Western Alliance (-4.98%).
On the other hand, the shares of the major American banking establishments rose.
There remains “a lot of uncertainty” about the evolution of the situation, notes Jack Allen-Reynolds, economist for the euro zone at Capital Economics, who wonders “how far will this situation lead us?”
For ten days and the flash bankruptcy of the American establishment Sillicon Valley Bank (SVB), the central banks have been forced to put in place numerous instruments to try to restore calm to the markets.
Tuesday begins the meeting of the monetary policy committee of the American central bank (Fed), which will have to make its decision the next day on the rise or not of its interest rates.
The institution is “torn” between its objective of calming the markets, which is pushing for a pause in rate hikes, and “its mandate of price stability”, which requires a new rise in order to slow inflation, from 6 % in the United States in February according to the CPI index, explains Ms. Hugel.
– Signals to relax –
The renewed concern at the start of the session, which could be seen in the rise in gold and the fall in bond yields, also dissipated in the markets.
After crossing the symbolic threshold of 2,000 dollars per ounce for the first time in a year, gold fell back to 1,976 dollars per ounce (-0.66%).
On the government bond market, rates stabilized in Europe and rose in the United States.
The euro took 0.50% against the dollar, to 1.0724 for a dollar, around 4:50 p.m. GMT.
On the oil market, the barrel of American WTI fell by 1.11% to 66.00 dollars, around 4:40 p.m. GMT, and the barrel of Brent from the North Sea by 0.81% to 72.38 dollars.