Markets bounce back following rescue of Credit Suisse

Global stock markets rebounded on Tuesday after the US and UK governments made fresh assurances over the stability of the banking sector following a string of bank failures.

Dublin

Euronext Dublin finished the day up 2.5 per cent, outperforming many of its international peers

The boost for the market was described as “cross-sectional” by a trader, who said the general market moved higher.

“Maybe investors feel the problems have been resolved regarding the Credit Suisse debacle and the potential for contagion to the other banks,” he added.

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Bank of Ireland was up 6.8 per cent at close of business, while AIB moved 5.6 per cent higher. “They made back a lot of the losses that were incurred in the banking sector in recent days,” the trader said.

Other positive sectors including the industrials, where building materials giant CRH was up 1.7 per cent.

Among the paper names, box-maker Smurfit Kappa climbed 2 per cent. Elsewhere, the airlines also climbed higher with Ryanair up 4.3 per cent and EasyJet up 2.5 per cent.

Some of the food names sank into the red, however, with Kerry Group finishing the day down 1.6 per cent.

London

Stocks rebounded across the Irish Sea as the UK chancellor said the government “stands ready” to act if there is instability in the global markets as they adjust to a period of higher interest rates.

The FTSE 100 recorded its strongest day this year, closing 1.79 per cent higher, driven by positive sessions for the banking firms, which sprang back after a recent sell-off.

NatWest surged up of the blue-chip index with its share price jumping 5.7 per cent. Barclays was close behind with shares up 5 per cent, while Standard Chartered and Lloyds were also trading higher.

In company news, Just Eat said it was cutting about 1,700 delivery driver jobs and 170 head office roles after a slowdown in demand. Investors did not appear to be deterred by the move and its share price lifted by 1 per cent at the end of the day.

Tesco customers expressed their disappointed after the supermarket told Clubcard holders it was cutting the value of rewards so that it could continue to keep prices low. Shares in the UK’s biggest supermarket lifted by 2.8 per cent.

Meanwhile, B&Q owner Kingfisher said it expected its falling profits to drop even further this year, after balancing rising costs with attempts to maintain prices for customers. Its value slipped by 1.5 per cent.

Europe

Banking stocks, which seem headed for their biggest monthly slide in three years, rose 3.9 per cent, helping lift the regional Stoxx 600 index by 1.4 per cent.

Analysts said the Swiss government-backed takeover of Credit Suisse by UBS helped soothe concerns over European financial stability, even though a wipeout of some Credit Suisse bondholders has sent shock waves through bank debt markets.

On the continent, the German Dax closed 1.75 per cent higher while the French Cac climbed 1.42 per cent.

New York

Wall Street’s main indexes climbed after the rescue of Credit Suisse calmed nerves about a bigger banking crisis, while investors awaited the outcome of the Federal Reserve’s monetary policy meet.

Boosting the S&P 500, big US banks JPMorgan Chase, Citigroup and Bank of America jumped 3-4 per cent.

Beaten-down regional lenders also climbed, with First Republic Bank rebounding nearly 40 per cent after hitting a record low on Monday.

PacWest Bancorp and Western Alliance Bancorp rose 15.5 per cent and 16.1 per cent respectively.

Among big movers, Meta Platforms gained 0.4 per cent after Morgan Stanley upgraded the stock to “overweight” from “equal weight”, while Tesla jumped 5.9 per cent on expectations of a strong quarter in China following the latest retail sales data.

At 11.35am eastern time, the Dow Jones Industrial Average was up 0.75 per cent; the S&P 500 was up 0.85 per cent; and the Nasdaq Composite was up 0.84 per cent. (Additional reporting: Agencies)