Stocks rose Thursday as Wall Street grew increasingly optimistic after a group of banks said it would aid First Republic amid the industry’s crisis.
First Republic shares cut their steep decline and turned positive after a group of banks announced they would deposit $30 billion in First Republic. The vote of confidence turned the market higher, while the SPDR S&P Regional Banking ETF closed 3.5 per cent higher. First Republic shares closed 10.3 per cent higher.
The Dow Jones Industrial Average index added 1.2 per cent, after falling by more than 300 earlier in the session. The S&P 500 gained 1.8 per cent despite at one point trading down 0.7 per cent.The Nasdaq Composite Advanced 2.5 per cent.
All three indexes are on pace to end the week higher than where they began, led by the Nasdaq Composite with a 5 per cent advance.
Also boosting markets was an announcement from Credit Suisse overnight that it will secure a line of credit of up to nearly $54 billion from the Swiss National Bank and announce plans to repurchase debt to assure short-term liquidity. The embattled bank after it fell to a record low Wednesday following reports that the Saudi National Bank, Credit Suisse’s largest investor, said it would not provide additional assistance.
Thursday’s moves come after the news surrounding Credit Suisse sent other European banking stocks and the broad S&P 500 index lower on Wednesday. Investors have been closely watching bank stocks after the closures of Silicon Valley Bank and Signature Bank prompted concerns of contagion in the sector in recent days.
In commodity news, Moody’s Investors Service has revised its global Metals & Mining outlook to stable from negative due to better business conditions in the US and Europe and the reopening of the Chinese economy. However, Moody’s anticipates continued volatility in metal commodity prices, which are expected to remain historically high, driven by economic growth and activity indicators in China and major economies.
Looking ahead, while the evolving banking crisis has recently been front and centre, attention is shifting to central-bank policy, particularly 22-Mar’s FOMC. Expectations have been volatile over the past week but consensus is settling around a final 25bp hike next week with possibility of rate cuts beginning this summer.
Overnight, most S&P500 sectors closed higher. Technology and Communication Services were the standouts, each closing by more than 2.5 per cent each.
The SPI futures are pointing to a 0.4 per cent rise.
One Australian dollar at 7:35 AM has strengthened compared to the US dollar yesterday buying 66.58 US cents (Thu: 66.18 US cents).
Iron ore futures are pointing to a 0.6 per cent fall.
Gold lost 0.4 per cent. Silver fell 0.3 per cent. Copper added 0.8 per cent and oil gained 1.1 per cent.
Figures around the globe
Across the Atlantic, European markets closed higher. London’s FTSE added 0.9 per cent, Frankfurt gained 1.6 per cent while Paris closed over 2 per cent higher.
In Asian markets, Tokyo’s Nikkei lost 0.8 per cent, Hong Kong’s Hang Seng fell 1.7 per cent while China’s Shanghai Composite closed 1.1 per cent lower.
Yesterday, the Australian sharemarket closed 1.5 per cent lower at 6,965.54
Adrad Holdings (ASX:AHL) is paying 0.7 cents fully franked
Carsales.Com (ASX:CAR) is paying 28.5 cents fully franked
H&G High Conviction (ASX:HCF) is paying 2 cents unfranked
Vita Life Sciences (ASX:VLS) is paying 3.25 cents fully franked
Ashley Services Group Ltd (ASX:ASH)
Baby Bunting Group Ltd (ASX:BBN)
Bapcor Ltd (ASX:BAP)
Beacon Lighting Group Ltd (ASX:BLX)
Centrepoint Alliance Ltd (ASX:CAF)
Ebos Group Ltd (ASX:EBO)
Estia Health Ltd (ASX:EHE)
Infomedia Ltd (ASX:IFM)
IPH Ltd (ASX:IPH)
IRESS Ltd (ASX:IRE)
Jumbo Interactive Ltd (ASX:JIN)
Kelsian Group Ltd (ASX:KLS)
Nickel Industries Ltd (ASX:NIC)
Pinnacle Investment Management Group Ltd (ASX:PNI)
Platinum Asset Management Ltd (ASX:PTM)
Probiotec Ltd (ASX:PBP)
Schaffer Corp Ltd (ASX:SFC)
SkyCity Entertainment Group Ltd (ASX:SKC)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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