Global stock markets advance as anxiety about banking crisis fade
Global stock markets advanced on Wednesday as anxiety about the global banking crisis fade following the rescue of Credit Suisse and Silicon Valley Bank.
To calm worries about the banking sector, regulators around the world, earlier this month, had announced programs to help lenders raise cash.
US stocks
US stocks gained on Wednesday with S&P 500 rising 1.4%. The Dow Jones Industrial Average gained 1% and the Nasdaq Composite jumped 1.8%.
US treasury yields rose as worries over inflation prompted investors to reassess their expectations for monetary policy from central banks.
Yield on the 2-year treasury note gained 2.3 basis points (bps) to 4.085%.
European equities
European equities closed higher on Wednesday, led by gains in banks. The pan-European benchmark STOXX 600 index climbed 1.3%.
In Switzerland, UBS shares jumped as much as 5% after it appointed former CEO Sergio Ermotti to lead its takeover of Credit Suisse.
Credit Suisse surged 4%.
Germany’s DAX rose 1.2% at 15,328.78. France’s CAC 40 gained 1.4% at 7,186.99.
Britain’s FTSE 100 added 1.1% at 7,564.27.
The Bank of England (BoE) on Wednesday tried to calm investors’ concerns about contagion risk from banking crisis to UK banks.
The BoE’s financial policy committee said UK banks remain resilient and largely unaffected by the sector’s upheaval in Switzerland and the United States. “UK banks are not exposed to material direct losses associated with the failure of (US bank) SVB and takeover of Credit Suisse, and they have very limited direct exposure to regional US banks,” it added.
Asian shares
Asian shares rose on Wednesday, buoyed by Chinese tech giant Alibaba’s plans to split into six business units.
Hong Kong-listed Alibaba closed over 12% higher after it announced that it would split its $220 billion company into six units.
Alibaba said the changes were intended to unlock shareholder value and foster market competitiveness.
Hong Kong’s Hang Seng index rallied 2.1% at 20,192.40. Shanghai Composite dropped 0.2% at 3,240.06. South Korea’s Kospi ended flat.
Japan’s Nikkei 225 gained 1.3% at 27,883.78. Australia’s S&P-ASX 200 rose 0.2% to 7,050.30.
Bullion
Gold prices fell on bullish stock markets and strong dollar.
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