Stocks gain on hopes bank crisis is easing
STORY: There was some relief for stock investors Tuesday (March 21).
Shares rose around the world as fears of a banking crisis eased, for now at least.
After gains for most of Asia, Europe then opened in the green.
The region’s STOXX 600 index was up over 1% in early trade.
Bank shares jumped around 3%.
The gains come after the weekend rescue of troubled Swiss bank Credit Suisse by local rival UBS.
Investors have also welcomed rapid moves by central banks to provide lenders with extra liquidity.
Policymakers including ECB chief Christine Lagarde have this week stressed that this isn’t a repeat of the 2008 global financial crisis:
“The euro area banking sector is resilient with strong capital and liquidity positions.”
However, the worries have far from ended.
The focus now is on smaller U.S. banks including First Republic.
Its shares halved in value on Monday amid concerns that an earlier $30 billion lifeline wouldn’t be enough.
JPMorgan boss Jamie Dimon is reported to be leading talks with other big banks on how to stabilise First Republic.
Now the focus turns to a two-day policy meeting by the U.S. Federal Reserve, which starts Tuesday.
Policymakers there will have to decide whether to press ahead with rate hikes which many see as a factor in the recent turmoil.
