Thanks to lingering uncertainty about the banking sector, shares of troubled Deutsche Bank surged by 4.5% after its nosedived on Friday.
Frankfurt DAX index leapt 1.4% to 15,165.39 points on Monday.
London and Paris also climbed as Asian stocks were mixed at the start of what could be described as a rocky week for global markets.
Stocks
- Tokyo – Nikkei 225: UP 0.3% at 27,476.87 (close)
- Hong Kong – Hang Seng Index: DOWN 1.8% at 19,549.69
- Shanghai – Composite: DOWN 0.5% at 3,248.97 (close)
- London – FTSE 100: UP 0.4% at 7,432.79
Currency
- Euro/dollar: DOWN at $1.0754 from $1.0764 on Friday
- Pound/dollar: UP at $1.2238 from at $1.2230
- Euro/pound: DOWN at 87.88 pence from 87.96 pence
- Dollar/yen: UP at 131.01 yen from 130.70 yen
Crude
- West Texas Intermediate: 0.7% at $69.74 per barrel
- Brent North Sea crude: UP 0.7% at $75.50 per barrel
In Asia, Hong Kong and Shanghai stocks dipped, while Tokyo, Sydney and Singapore rose following a positive finish on Wall Street last week.
The US Federal Deposit Insurance Corporation (FDIC) revealed that First Citizens had agreed to buy Silicon Valley Bank.
Concerns over Deutsche Bank had triggered more worries last week, prompting US President Joe Biden, German Chancellor, Olaf Scholz and other European officials to try and calm investors about the health of the banking sector.
Scholz assured traders that Deutsche Bank was “very profitable” after its shares plunged on Friday.
The German bank returned to financial health last year following a major restructuring after years of problems.
Clifford Bennett, chief economist at ACY Securities, said Monday it was unlikely the German government would allow Deutsche Bank to collapse or face restructuring.
But it showed “the continuing and growing pressure on the banking system among the major Western economies”, he wrote in a note.
“No bank is immune in the current climate. The forces that lead to the crisis so far seen, of higher rates and depositor uncertainty, only continue to grow.”
Markets had rallied last week after financial authorities acted to prevent contagion from the collapse of US regional lenders this month.
But sentiment soured following decisions by central banks in the United States, Britain and Switzerland to hike interest rates, despite concerns about the impact of the monetary tightening on banks.
