Shares bounce back as fears over a global banking crisis begin to subside
London-listed lending giants Barclays, NatWest and Lloyds were all trading higher following further hefty falls on Monday after the rescue takeover of Credit Suisse by UBS over the weekend.
It comes after a punishing past couple of weeks for the financial sector amid mounting worries over a systemic crisis in the global banking sector sparked off by the collapse of Silicon Valley Bank and a number of regional US bank lenders.
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Hide AdSteve Clayton, head of equity funds at Hargreaves Lansdown, said: “Markets took a breather from fretting about banking contagion overnight.
“Wall Street saw modest rallies across leading industrial, financial and technology sectors as investors dissected the detail of the rescue of Credit Suisse by longstanding rival, UBS.”
He added: “Initially sceptical of the deal, the market’s mood changed over the course of yesterday, with UBS shares ending higher after a sharp initial fall.”
Traders are expecting more turbulence to come, however, with the US Federal Reserve deciding on interest rates on Wednesday, followed by the Bank of England and the Swiss National Bank on Thursday.
The flurry of US rate rises is seen as being behind the troubles suffered by some US regional bank lenders, according to analysts.