US, European stocks rise after Credit Suisse-UBS deal
2 min read . Updated: 21 Mar 2023, 02:13 AM IST
PremiumThe S&P 500 up 0.9%, Dow Jones gains 1.20%. The European STOXX 600 index closes 0.98% higher
US and European stocks rose in choppy trade on Monday as investors digested the Credit Suisse-UBS deal.
UBS Group AG on Sunday announced that it has agreed to buy Credit Suisse Group AG for 3 billion Swiss francs in a Swiss government-brokered deal aimed at containing the global banking crisis.
The S&P 500 rose 0.9% on Monday. The Dow Jones Industrial Average gained 1.20%. The Nasdaq added 0.39%.
First Republic Bank shares tumbled 47.3% after S&P cut its credit rating to ‘B’ from ‘BB’ on Sunday.
US treasury yields also rose ahead of the Federal Reserve meeting this week. The yield on 10-year treasury gained 5 basis points to 3.48%.
Regulators in the US and Europe have tried to calm fears over global banking crisis.
The European Central Bank (ECB) on Monday said Europe’s financial system is “resilient" with sufficient liquidity.
US treasury secretary Janet Yellen and US Federal Reserve chair Jerome Powell on Sunday said they “welcomed" the Credit Suisse deal, and also said that the capital and liquidity of US banks is strong.
After the Credit Suisse-UBS deal, investors’ focus will be on Fed’s decision on interest rate at this week's meeting.
The global banking crisis started after two US banks-- Silicon Valley Bank and Signature Bank-- collapsed this month.
European stocks
Stocks in London, Frankfurt and Paris opened more than 1% lower on Monday.
The European STOXX 600 index closed 0.98% higher.
Germany’s DAX climbed 1.1% at 14,933.38. France’s CAC 40 surged 1.3% at 7,013.14. Britain’s FTSE 100 rose 0.9% at 7,403.85.
European banks pared losses climbing 1.3% after initially declining 6%.
Shares of Credit Suisse plummeted 55.7%. UBS shares reversed its 13% loss and rose 1.3%.
Asian shares
Asian shares closed down on Monday on fears of contagion of banking crisis.
Hong Kong's Hang Seng index slid 2.7%. The Shanghai Composite index lost 0.5% at 3,234.91. South Korea’s Kospi retreated 0.7% at 2,379.20.
The Nikkei 225 in Tokyo shed 1.4% at 26,945.67.
Australia’s S&P ASX 200 lost 1.4% at 6,898.50.
India's Sensex fell 1.3% at 57,241.4.
Bullion
Gold prices rose to one-year high earlier in the day but later fell in a choppy trade. Spot gold dropped 0.46% to $1,978.83 an ounce, after touching $2,009.59 an ounce.