US, European shares rise as banking crisis fears ease after Credit Suisse-UBS deal

UBS Group AG announced on Sunday that it has agreed to buy Credit Suisse Group AG for 3 billion Swiss francs in a deal brokered by the Swiss government with the aim of tackling the global banking crisis.

The S&P 500 climbed 0.9% on Monday. The Dow Jones Industrial Average rose 1.20%. The Nasdaq added 0.39%.

The S&P Banking Index climbed 0.6%. Shares of First Republic Bank plunged 47.1% on Sunday after S&P Global downgraded its credit rating to ‘B’ from ‘BB’.

US Treasury yields rose ahead of the Federal Reserve meeting this week. The yield on the 10-year Treasury rose 5 basis points to 3.48%.

Regulators in the US and Europe have tried to calm fears of a global banking crisis.

The European Central Bank (ECB) said on Monday that Europe’s financial system is “resilient” with sufficient liquidity.

US Treasury Secretary Janet Yellen and US Federal Reserve Chairman Jerome Powell said on Sunday that they “welcomed” the Credit Suisse deal and also said that the capital and liquidity of US banks was strong.

Following the Credit Suisse-UBS deal, investors will focus on the Fed’s interest rate decision at this week’s meeting.

The global banking crisis began after two US banks – Silicon Valley Bank and Signature Bank – collapsed earlier this month.

Shares of e-commerce giant Amazon fell 1.3% after it announced another 9,000 job cuts.

european stock

Stocks in London, Frankfurt and Paris opened Monday down more than 1%.

The European STOXX 600 index closed up 0.98%.

Germany’s DAX was up 1.1% at 14,933.38. France’s CAC 40 rose 1.3% to close at 7,013.14. Britain’s FTSE 100 rose 0.9% to close at 7,403.85.

European banks cut losses, climbing 1.3% after initially falling 6%.

Shares of Credit Suisse declined by 55.7%. Shares of UBS reversed their 13% losses and rose 1.3%.

asian stock

Asian shares closed lower on Monday on fears of a banking crisis.

Hong Kong’s Hang Seng index slipped 2.7%. The Shanghai Composite index closed down 0.5% at 3,234.91. South Korea’s Kospi closed down 0.7% at 2,379.20.

The Nikkei 225 closed down 1.4% at 26,945.67 in Tokyo.

Australia’s S&P ASX 200 closed down 1.4% at 6,898.50.

India’s Sensex fell 1.3% to 57,241.4.

bullion

Gold prices had hit a one-year high earlier in the day, but declined in later trade. Spot gold fell 0.46% to $1,978.83 an ounce after touching $2,009.59 an ounce.

oil prices

West Texas Intermediate crude futures rose 1.09% to $67.47 a barrel. Brent crude rose 1% to $73.7.