Markets rally after days of turmoil fuelled by bank worries

Traders in Dublin say Thursday was a ‘day of two halves’ amid late session rally

ECB president Christine Lagarde said: 'We are not waning on our commitment to fight inflation and we are determined to return inflation back to 2 per cent in the medium term.' Photograph: Alex Kraus/Bloomberg

European shares rallied on Thursday in an erratic session as investors weighed news that the Swiss central bank would provide liquidity to troubled Credit Suisse.

Shares in the lender soared after the bank said it was taking “decisive action” and will borrow up to €50 billion from its lender of last resort.

Markets were also digesting the European Central Bank’s (ECB’s) latest rates decision with Frankfurt opting to press ahead with a 50 basis point hike despite recent turmoil in financial markets.


Traders in Dublin said Thursday’s session was a “day of two halves”, finishing with the Iseq index up 2.3 per cent, recovering some of the ground lost earlier in the week.


The relief rally from news of the Credit Suisse bailout faded early in the session with stocks selling off throughout the morning. But the tide turned in the afternoon when US markets opened and after investors had digested news of the ECB’s latest rate hike.

While there was little or no theme to the broad-based rally, Irish financials were among the top performers after suffering one of their worst days in more than a year on Wednesday. Bank of Ireland was up almost 2.4 per cent to nearly €9.05 per share while AIB added 2.2 per cent to close at €3.62 and Permanent TSB gained 2.4 per cent to finish the session at €2.53.

Building materials giant RH, also among the top performers on the blue-chip Euro Stoxx 50 index on Thursday, climbed 3.5 per cent to €45.65 per share while Paddy Power owner Flutter topped the Irish index, up 4.2 per cent to €158.15 per share.


London’s top shares faced a rollercoaster session on Thursday, with traders sending the FTSE 100 up and down throughout the day. But despite turbulent trading it managed to close on a high, adding 0.9 per cent overall, coming off its worst day in almost three years on Wednesday.

Topping the table was pest control giant Rentokil. Shares in the company soared more than 10 per cent after it lifted its medium-term revenue and cost-saving forecasts from its acquisition of rival Terminix in 2021.

British specialist lender OSB Group marched 9.4 per cent ahead after reporting higher full-year profit while Lloyds and Barclays both added more than 3 per cent.

Mining and exploration stocks, meanwhile, weighed down the index amid declining crude oil and commodities prices. Anglo American was off by more than 3 per cent with oil majors Shell and BP off by 2.2 per cent and 0.9 per cent.


The pan-European Stoxx 600 gained almost 1.3 per cent, while the blue-chip Stoxx 50 was up more than 2 per cent.

Bank shares there were up 0.8 per cent, not including the surge by Credit Suisse or other Swiss lenders after the Swiss central bank confirmed it would provide €50 billion in liquidity to the beleaguered lender. Credit Suisse shares climbed more than 18 per cent on the session, while Julius Baer added 7.4 per cent.

Europe’s banking stocks suffered their steepest one-day drop in more than a year on Wednesday in the shadow of Credit Suisse’s woes, which followed the collapse of two US banks last week.

Meanwhile, German real estate group Vonovia, down 4.7 per cent, and Volkswagen, off by 1.2 per cent, were some of the very losers among the blue-chips.

New York

US stocks rallied after a report that big banks are in talks to bolster First Republic Bank sparked a rebound in shares of embattled regional lenders. All three big Wall Street stock indexes were green by closing bell in Dublin with the tech-heavy Nasdaq Composite up 1.9 per cent, the S&P 500 up 1.1 per cent and the Dow Jones Industrial Average having added 0.9 per cent.

US social media companies were rising on reports that the Biden administration may look to ban TikTok in the US. Shares in Snapchat owner Snap were up more than 7 per cent while Facebook owner Meta added 1.3 per cent. Intel and Adobe, meanwhile, added close to 6 per cent ecommerce behemoth was up 4 per cent.

Pharma giants Merck, Johnson & Johnson and Amgen were all off by about 0.3 per cent. – Additional reporting: Bloomberg, Reuters, PA

Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times