European Markets Extended Recent Gains

Bridgette Randall
29 Mar, 2023
Frankfurt

European markets rebounded for the second day in a row as investors looked beyond the current banking crisis in Switzerland and the United States. 

UBS rehired its former chief executive, after the Swiss-bank was forced by the Swiss government to takeover Credit Suisse, shoring confidence in bank stocks in the region. 

Market nerves were further soothed after the Federal Reserve Vice Chairman Supervision Michael Barr said the poor risk control and mismanagement and not systemic troubles were behind the recent demise of Silicon Valley Bank.  

Tech stocks were among the leading gainers after Alibaba Group announced a restructuring plan and split the company in six business units. 

The restructuring news lifted tech stocks in Europe, Asia and in New York trading. 

 

Indexes & Yields 

The DAX index increased 1.2% to 15,328.78, the CAC-40 index added 1.4% to 7,186.99 and the FTSE 100 index advanced 1.1% to 7,564.27. 

The yield on 10-year German Bunds increased to 2.82%, French bonds advanced to 2.82%, the UK gilts to 3.46% and Italian bonds to 4.14%. 

The euro inched up to $1.08, the British pound edged higher to $1.23 and the Swiss franc advanced to 91.94 cents. 

Brent crude decreased 14 cents to $78.50 a barrel and the Dutch TTF natural gas prices for immediate month delivery rose 31 cents to $43.06 per MWh. 

 

Europe Movers 

Mercedes Benz Group AG decreased 2.1% to €70.36 after Kuwait Investment Authority plans to reduce its stake in the luxury automaker. 

Kuwait's sovereign wealth fund plans to sell 20 million shares at average price of Є69.27 and raise about Є1.4 billion. 

After the sale, the sovereign fund will still hold about 53 million shares or 4.8% stake in the company. 

Infineon Technologies AG increased 6.9% to €35.88 after the German chipmaker raised its outlook for the fiscal second quarter and full-year 2023. 

Nordex SE advanced 1.3% to €12.78 after the German wind turbine maker won contracts to supply and install 14 wind turbines with a total capacity of 78 MW in Greece. 

Two wind farms with a total of 10 turbines are to be built in Boeotia in Central Greece, while one wind farm with four turbines is to be installed in Achaia in the north-west of the Peloponnese in western Greece.   

After commissioning the three wind farms will produce more than 232 GWh of electricity a year, equivalent to the consumption of 60,000 Greek households, and reducing the emission of around 100,000 tons of CO2 a year. 

Essentra Plc increased 5.4% to 187.0 pence after the components and systems maker launched a stock repurchase program. 

The company said revenue in 2022 increased 12% to £338 million from £302 million and net loss expanded to £31 million from £5 million and loss per share rose to 10.3 pence from 1.6 pence from a year ago. 

The company announced a plan to return £150 million capital to shareholders, consisting of £90 million in special dividend (29.8 pence per share) and £60 million through a stock repurchase plan. 

UBS Group AG increased 3.7% to Sfr 18.40 after the Swiss-bank rehired Sergio Ermotti as chief executive to lead the recent takeover of Credit Suisse. 

Ermotti served as chief executive for nine years to October 2020 and is currently Chairman of reinsurance company Swiss Re. 

Ermotti will replace current CEO Ralph Hamers on April 6 and Hamers will advise the company during the transition, said the company in a press statement.