BackSVB deal lifts US and European stocks, First Citizens shares soar over 53%
The S&P 500 rises 0.16% at 3,977.53. The Dow Jones Industrial Average gains 0.6% at 32,432.08. The pan-European STOXX 600 index surges 1.05%
PremiumThe stock markets in the US and Europe were lifted on Monday as the investors’ sentiments were boosted by the news of First Citizens BancShares Inc taking over assets of Silicon Valley Bank (SVB).
Shares of First Citizens soared 53.7% on the SVB deal announcement.
The S&P 500 rose 0.16% at 3,977.53. The Dow Jones Industrial Average gained 0.6% at 32,432.08. The Nasdaq Composite fell 0.47% at 11,768.84.
The S&P 500 bank index advanced more than 3%.
The US Federal Deposit Insurance Corporation (FDIC) on Sunday announced that First Citizens has agreed to acquire deposits and loans of SVB.
North Carolina-based First Citizens would take over SVB assets of $110 billion, deposits of $56 billion and loans of $72 billion. The FDIC will retain some $90 billion in securities.
The SVB deal announcement eased the fears over contagion of global banking crisis. A news report by Bloomberg on Saturday that US authorities are considering expansion of an emergency lending facility to support banks also gave a respite to investors. The collapse of Silicon Valley Bank and Signature Bank earlier this month had triggered the banking crisis.
US treasury
The yield on 10-year treasury note rose 14.8 basis points to 3.526%, from 3.378% on Friday. The yield on 2-year note was up 22.9 basis points to 4.0057%.
The yield on 30-year bond was up 11.3 basis points to 3.7569%.
European stocks
European stocks rebounded on Monday on easing concerns about banking sector. The pan-European STOXX 600 index gained 1.05%.
European banks rose 1.4% after the rout on Friday as concerns over Deutsche Bank’s credit default swaps rocked stock markets.
Deutsche Bank shares edged higher 6.2% after plunging 8.5% on Friday.
Germany’s DAX gained 1.1% at 15,127.68. France’s CAC 40 added 0.9% at 7,078.27. Britain’s FTSE 100 rose 0.9% at 7,471.77.
Healthcare stocks were the top gainers in the continent, climbing 1.9%. Novartis rallied 7.7% after it said its Kisqali breast cancer drug can reduce risk of recurrence in women diagnosed at an early stage.
Asian shares
Asian shares were mixed on Monday, with Hong Kong and Shanghai stocks falling, while Tokyo, Sydney and Singapore rising.
MSCI's broadest index of Asia-Pacific shares, outside Japan, fell 0.81%.
Hong Kong’s Hang Seng index dropped 1.8% at 19,567.69. Shanghai Composite fell 0.5% at 3,248.97. South Korea’s Kospi shed 0.3% at 2,408.58.
Japan’s Nikkei 225 rose 0.3% at 27,476.87.
In Australia, the S&P/ASX 200 index gained 0.1% at 6,962.0.
Crude oil
Oil prices rallied after Iraq was forced to halt some crude exports from Kurdistan region. US crude prices ended 5.13% higher at $72.81 per barrel. Brent closed up 4.17% at $78.12.
Bullion
Gold prices fell on Monday. Spot gold edged lower 1.1% at $1,955.96 an ounce. US gold futures dipped 1.26% at $1,952.40 an ounce.
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