Stock markets in the US and Europe went up on Thursday because worries about a growing banking crisis were calmed by the Swiss central bank’s help with Credit Suisse’s liquidity and the European Central Bank’s (ECB) decision to raise interest rates.
Thursday, ECB policymakers agreed to raise interest rates by 50 basis points (bps) to bring down sky-high inflation. This was the sixth rise in a row.
Investors liked what the ECB did, and they are now waiting to see what the US Federal Reserve does next week with interest rates.
US stocks
On Thursday, US stocks went up because it was said that a group of banks was getting ready to put billions of dollars into First Republic Bank.
A group of 11 private US banks, including Bank of America, Citigroup, and JPMorgan Chase, said they would put $30 billion into First Republic Bank.
Thursday began with US stocks going down, but later they started to go up.
The S&P 500 went up by 1.76 percent to 3,960.28. The industrial average of the Dow Jones This week, shares of the First Republic Bank have dropped about 70% on rumours that it could be the next bank to fail after Silicon Valley Bank and Signature Bank.
This week, shares of the First Republic Bank have dropped about 70% on rumours that it could be the next bank to fail after Silicon Valley Bank and Signature Bank.
up 1.17 percent to 32,246.55. The Nasdaq Composite rose by 2.48 percent, reaching 11,717.28.
European stocks
The main index for European stocks, the STOXX 600, went up 1.3% at the end of the day because Credit Suisse got a financial lifeline and the ECB raised interest rates.
The Europe’s banking sector index gained 1.2%. Throughout the day, it went down 1%.
The DAX ended the day up 1.6%. France’s CAC 40 went up by 2%. Britain’s FTSE 100 rose 0.9%.
The US dollar also got stronger against the euro.
After a big drop on Wednesday, Credit Suisse shares jumped more than 30% when the market opened on Thursday. This was because the Swiss National Bank gave Credit Suisse a financial lifeline of up to $54 billion.
The stock of the Swiss bank ended the day up more than 19%.
Stocks in Asia
Asian stocks went down on Thursday. The MSCI index of Asia-Pacific stocks outside of Japan, which is used as a benchmark, fell 1% to its lowest level of the year. In Japan, Australia, and Hong Kong, financial companies were among the worst hit.
Hong Kong’s Hang Seng index fell 1.7% at 19,203.91. At 3,226.89, the Shanghai Composite Index went down by 1.1%.
The S&P/ASX 200 index ended the day 1.5% lower, at 6,965.50.
Japan’s Nikkei 225 dropped 0.8% at 27,010.61.
Bonds
The return on the benchmark 10-year Treasury note went up to 3.56 percent. The yield on a two-year bond hit 4.1175%, up from the previous close of 3.975%.
Bullion
The spot price of gold went up by 0.03% to $1,918.63 an ounce. At $1,923 per ounce, US gold futures fall by 0.4%.
Source: Team CurrencyVeda
