European stocks rebound as banking jitters ease


By Sruthi Shankar

March 27 (Reuters) - European stocks climbed on Monday, as a sense of calm returned to markets following a week of turbulence over concerns about banking sector stability after the collapse of Credit Suisse and two U.S. mid-sized lenders.

The pan-European STOXX 600 index .STOXX rose 0.9%, with investors drawing comfort from that First Citizens BancShares Inc FCNCA.O would acquire Silicon Valley Bank's SIVB.O deposits and loans.

European banks .SX7P rose 0.9% after shedding 3.8% on Friday, when Deutsche Bank DBKGn.DE sparked a rout in the sector. Shares of the German lender were up 3.3% after tumbling 8.5% on Friday.

Shares of Swiss bank UBS UBSG.S, which took over Credit Suisse in a rescue deal last week, slipped 0.8% to trade about 15% below its early March highs.

Credit Suisse CSGN.S inched up 0.4% as the Swiss financial regulator, FINMA, said over the weekend that it was considering whether to take disciplinary action against the bank.

"Many investors still don't want to touch the banking sector for fears there is more distress to come," said Russ Mould, investment director at AJ Bell.

"Yet for every bleak situation, there is always someone who sees an opportunity to make money, hence why we're seeing a rise in the share price of many European banks today."

European stocks are looking to end the first quarter of the year with gains, buoyed by signs of economic resilience and hopes that central banks are near the end of their tightening cycles. However, European banks are set to end the quarter nearly flat amid the banking sector turmoil.

An Ifo institute survey showed German business morale unexpectedly rose in March, adding to signs that Europe's largest economy is recovering despite the energy crisis and high inflation.

Among single stocks, Novartis NOVN.S climbed 5.7% after the Swiss drugmaker said its Kisqali breast cancer drug had been shown to cut the risk of recurrence in women who were diagnosed at an early stage of the disease.

Healthcare stocks .SXDP were the top gainers in Europe, rising 1.6%.

French telecom company Orange ORAN.PA rose 2.8% after Morgan Stanley upgraded the stock to "overweight".

Shares of China-exposed luxury names such as Pernod Ricard PERP.PA and miners including Rio Tinto RIO.L slipped after data showed a slump in Chinese industrial firms' profits deepened in the first two months of 2023.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Subhranshu Sahu)

((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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