EUROPEAN SHARES RISE AFTER LATEST BANKING RESCUE (0910 GMT)
European shares extended their recovery on Friday as supportive measures for banks in the
United States and Europe calmed fears about an imminent collapse, but the index was still set to
post a second successive weekly drop.
The pan European STOXX 600 index is up around 0.7%, supported by oil and gas
and basic resource companies up 2.6% and 2.4% respectively.
The banking sector also recovered ground, up around 1%, after large U.S. banks
injected a $30 billion lifeline into San Francisco-based First Republic Bank on Thursday
to rescue the lender.
The package came less than a day after Swiss bank Credit Suisse clinched an
emergency central bank loan of up to $54 billion to shore up its liquidity.
But volatility in the sector remains high. Credit Suisse shares are down around 5% following
two days of sharp swings, which saw the lender’s shares jump 20% on Thursday following a 24%
drop on Wednesday.
EUROPEAN SHARES SEEN HIGHER AFTER BANK RESCUES (0750 GMT)
European futures point to a start of the day in positive territory for bourses across the
region after the latest bank rescues helped douse market fears about an widerspread banking
Large U.S. banks injected funds into San Francisco-based First Republic Bank on
Thursday, injecting a $30 billion lifeline in to rescue the lender that has been caught up in a
widening crisis triggered by the collapse of two other mid-size U.S. lenders over the past week.
EUROSTOXX 50 futures are up 0.6%.
SUPPORT FOR TROUBLED BANKS CALMS MARKETS (0716 GMT)
The week-long rollercoaster ride for global markets turned calmer and a little more positive on
Friday as investors heaved a sigh of relief over efforts in the United States and Europe to
backstop troubled lenders.
Asian stock markets clawed back 1.7% after after a 2.7% fall to more than three month lows
Markets were relieved by moves by large U.S. banks to inject $30 billion in deposits into
First Republic Bank on Thursday and rescue the lender caught up in a widening crisis triggered
by the failure of two other mid-size U.S. lenders over the past week.
As promised, the European Central Bank raised interest rates by 50 basis points despite
calls by some investors to hold back on policy tightening until the turmoil in the banking
What seems to have changed is the guidance for rate hikes though many policymakers had
suggested in recent weeks that sizeable increases were warranted.
On Friday, final CPI data for the eurozone is due in a thin calendar for economic data
As risk sentiment improved, the dollar eased and risk-sensitive currencies strengthened.
Meanwhile, the Federal Reserve is set to continue its inflation-fighting campaign with a
quarter-point hike in interest rates, that just days ago had looked doubtful due to the turmoil
in the banking sector.
While Credit Suisse Group shares recovered most of the losses suffered on Wednesday after
it said it would tap into a $54 billion loan from the Swiss National Bank, some analysts believe
that the support has only bought the lender some time to work out what to do next.
Citing people with knowledge of the matter, Bloomberg News reported that UBS Group and
Credit Suisse are opposed to a forced merger.
On the corporate front, Sanofi said it would cut U.S. list prices for its most-prescribed
insulin product, Lantus, by 78% starting next year following similar moves by U.S. rivals.
Key developments that could influence markets on Friday:
Europe economic data: Eurozone final Feb CPI, Q4 labour costs
U.S. economic data: University of Michigan survey
Here's our summary of key economic events overnight that affect New Zealand, with news investors are bracing for another week of financial turmoil. But first
WASHINGTON/FRANKFURT : Stress in the banking sector is being closely monitored for its potential to trigger a credit crunch, a U.S. Federal Reserve policyma
The head of the International Monetary Fund has warned that the global economy faces risks to its financial stability because of the turbulence in the banking s
WASHINGTON/FRANKFURT, March 26 (Reuters) - Stress in the banking sector is being closely monitored for its potential to trigger a credit crunch, a U.S. Federal