Hot Features
Premium
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
London open
London stocks rose in early trade on Thursday following a heavy selloff in the previous session, as bank shares recovered after Credit Suisse took a $54bn loan from the Swiss National Bank.
At 0845 GMT, the FTSE 100 was up 0.9% at 7,409.47, having closed down a whopping 3.8% on Wednesday, led by banks.
Beleaguered Swiss lender Credit Swiss said earlier that it has agreed to take a CHF50bn ($54bn) loan from the Swiss National Bank after its shares tumbled on Wednesday, sparking a selloff in global financial markets.
CS also said it was making a cash tender offer in relation to 10 US dollar-denominated senior debt securities for up to $2.5bn and a separate cash tender offer in relation to four Euro-denominated senior debt securities for €500m.
Chief executive officer Ulrich Koerner said: “These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders.
“My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs.”
Shares in Credit Suisse crumbed more than 40% on Wednesday after top shareholder Saudi National Bank said it would not provide the lender with any further financial support.
According to reports, asked whether his bank was open to further injections of cash if there was another call for more liquidity, Saudi National Bank’s chairman Ammar Al Khudairy said: “The answer is absolutely not, for many reasons outside the simplest reason which is regulatory and statutory.”
However, he later told CNBC that Wednesday’s panic was not warranted.
“There has been no discussions with Credit Suisse about providing assistance,” he told CNBC’s Hadley Gamble. “I don’t know where the word ‘assistance’ came from, there has been no discussions whatsoever since October.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Credit Suisse is the first major bank, deemed too big to fail, to take up the offer of an emergency lifeline. The announcement that it will draw on emergency funds from the Swiss National Bank underlines how fragile the lender had become, as the withdrawal of deposits continued at pace and confidence seeped away.
“It also highlights the lightning speed of the global fall-out of Silicon Valley Bank’s collapse, which has shaken the banking sector, and prompted investors spotting weaknesses in other institutions, to race for the exit. The $54 billion rescue wad is staunching worries about a bigger run on Credit Suisse and the repercussions for other institutions around the world exposed to its operations.
“For now, the move has restored a little stability to global markets, with the S&P 500 regaining ground, once it appeared the Swiss National Bank was standing by to help. Nerves are still frayed though and that has been evident during trade in Asia.”
Looking ahead to the rest of the day, investors were eyeing the latest policy announcement from the European Central Bank at 1315 GMT.
In equity markets, banks recovered some poise, with Barclays, HSBC and Lloyds among the top performers on the FTSE 100.
Investors were also sifted through a raft of earnings.
Rentokil rallied as it posted a jump in full-year profit and hiked its dividend, underpinned by recent acquisitions.
OSB, Bridgepoint and Helios were also trading up after results, while Investec gained after saying it expects to report an increase in full-year operating profit as it benefits from continued client acquisition, rising global interest rates and higher average advances.
On the downside, gold miner Centamin lost its shine despite saying that full-year profits rose 11% to $171m, driven by a strong rise in production.
Real estate agent Savills was in the red as it said it expects a tough first half of the current year and reported a fall in annual profits.
NatWest, Segro, Crest Nicholson, Dunelm, Anglo American, Spirent Communications and Ferguson were all trading without entitlement to the dividend.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rentokil Initial Plc | +6.44% | +32.40 | 535.40 |
| 2 |  |
International Consolidated Airlines Group S.a. | +2.69% | +3.60 | 137.24 |
| 3 |  |
Lloyds Banking Group Plc | +2.58% | +1.19 | 47.20 |
| 4 |  |
Ocado Group Plc | +2.47% | +10.50 | 435.50 |
| 5 |  |
Barclays Plc | +2.34% | +3.24 | 141.48 |
| 6 |  |
Easyjet Plc | +2.23% | +10.50 | 480.70 |
| 7 |  |
Rolls-royce Holdings Plc | +2.04% | +2.94 | 147.08 |
| 8 |  |
Hsbc Holdings Plc | +1.93% | +10.60 | 559.00 |
| 9 |  |
Admiral Group Plc | +1.74% | +33.00 | 1,929.50 |
| 10 |  |
Glencore Plc | +1.60% | +6.60 | 418.60 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Segro Plc | -3.02% | -23.60 | 759.00 |
| 2 |  |
Tui Ag | -2.34% | -34.50 | 1,438.50 |
| 3 |  |
Fresnillo Plc | -2.25% | -16.60 | 721.00 |
| 4 |  |
Anglo American Plc | -1.95% | -50.00 | 2,509.50 |
| 5 |  |
National Grid Plc | -0.81% | -8.50 | 1,040.00 |
| 6 |  |
United Utilities Group Plc | -0.81% | -8.50 | 1,045.00 |
| 7 |  |
Bhp Group Limited | -0.77% | -18.50 | 2,369.50 |
| 8 |  |
Experian Plc | -0.68% | -18.00 | 2,611.00 |
| 9 |  |
Vodafone Group Plc | -0.57% | -0.54 | 93.48 |
| 10 |  |
Ashtead Group Plc | -0.50% | -25.00 | 4,946.00 |
US close: Stocks mixed as central bank backs Credit Suisse
Wall Street stocks closed mixed on Wednesday, as the banking sector weighed on major indices.
The Dow Jones Industrial Average fell 0.87% to 31,874.57, while the S&P 500 lost 0.7% to 3,891.93.
In contrast, the Nasdaq Composite managed to eke out a slight gain of 0.05% to reach 11,434.05.
Investor sentiment was initially rattled by reports that a top shareholder of Credit Suisse would not provide the struggling lender with any further financial assistance.
However, Switzerland’s central bank issued a public statement of support for Credit Suisse in the evening, helping to somewhat calm markets.
In currency markets, the dollar weakened slightly against its major trading pairs, falling by 0.15% against the yen to JPY 133.22.
Against the euro and sterling, the greenback declined 0.13% and 0.11%, respectively, to €0.9442 and £0.8285.
“Hopes for a return of calm have been dashed today, as what began with a regional banking crisis in the US morphs into another crisis over European banks, with Credit Suisse the name in everyone’s sights,” said IG chief market analyst Chris Beauchamp earlier.
“The bank has seen its biggest shareholder rule out providing more funding, followed by an appeal for public support from the Swiss National Bank.”
Beauchamp said such headlines were not the kinds of things likely to encourage investors to head back into European banking stocks.
“After having been relatively unaffected by the initial stages of the crisis, stocks in Europe have really joined in the selling, erasing more of their 2023 gains.”
Swiss National Bank rescues market from jitters
Switzerland’s central bank publicly pledged its support for Credit Suisse in an evening statement, saying it would provide liquidity to the bank if needed.
The Swiss National Bank and the Swiss Financial Market Supervisory Authority asserted that the financial difficulties of certain US banks would not directly threaten the Swiss financial markets.
They confirmed that Credit Suisse met the capital and liquidity requirements imposed on systemically important banks, and that if necessary, the SNB would provide liquidity to the bank.
On the macroeconomic front, producer inflation in the US unexpectedly fell last month due to a drop in food and service prices.
The US Department of Labor reported that total final demand prices decreased by 0.1% in February, compared to economists’ predictions of a 0.4% rise.
January’s estimate of the gain in final demand prices was also revised downwards from 0.7% to 0.3%.
Elsewhere, despite a spending spree in January, Americans barely cut back on their spending last month according to fresh data.
The Department of Commerce reported that US retail sales volumes declined by 0.4% in February to reach $697.88bn, in line with economists’ forecasts.
However, January’s monthly increase in retail sales was revised up by two tenths of a percentage point to 3.2%.
The National Association of Homebuilders/Wells Fargo housing market index meanwhile rose for the third consecutive month, beating market expectations.
The index increased to 44 in March, the highest reading since September 2022.
The gauge for current sales conditions increased to 49, while prospective buyer traffic rose to a six-month high of 31.
However, sales expectations for the next six months slightly declined to 47 from 48.
Finally on data, manufacturing activity in the New York region significantly deteriorated in March, according to data from the New York Fed’s Empire State index.
The index fell to -24.6 from -5.8 in February, well below expectations for a decline to -8.0. 45% of respondents reported worsening conditions, while 20% reported an improvement.
The new orders index declined to -21.7 in March from -7.8 in February, while the shipments index was -13.4, down from 0.1.
Bank stocks join global financials selloff
In equities, bank stocks joined a global selloff today on the back of the Credit Suisse concerns, with Citigroup down 5.44%, and Wells Fargo & Company losing 3.29%.
Beauty company Coty provided a positive outlook for full-year sales on a like-for-like basis, citing strong growth in its fiscal third quarter.
Despite that, its shares ended the day 1.82% weaker.
On the upside, work management platform Smartsheet surged 17.77% after reporting a surprise net income.
Thursday newspaper round-up: Co-op, TikTok, Credit Suisse
Autonomous delivery robots will hit the streets of Greater Manchester this week as the Co-op partners with the self-driving logistics company Starship Technologies to bring its six-wheeled bots to a seventh British city. Five years after making their first UK delivery in Milton Keynes, Starship has expanded to cover hundreds of thousands of households across the country, offering services in cities including Cambridge, Leeds and Northampton.. – Guardian
The Biden administration has threatened to ban TikTok in the US unless the social media company’s Chinese owners divest their stakes in it, according to news reports on Wednesday. The move, first reported by the Wall Street Journal, is the most dramatic in a series of escalations by US officials and legislators, driven by fears that US user data held by the company could be passed on to China’s government. It also comes amid a global backlash to the popular video-based app over concerns about the potential for Chinese spying, with countries including the UK, Canada and Australia recently moving to ban the app from government phones. – Guardian
Credit Suisse has announced that it will borrow up to 50 billion Swiss francs (£44.5bn; $54bn) from Switzerland’s central bank to reinforce the group after its shares plunged. In a statement, the troubled bank said it was also making buyback offers on about 2.8 billion francs of debt. – Telegraph
Business groups have urged the government to make permanent a new £9 billion-a-year capital allowances scheme designed to stimulate investment. The chancellor yesterday announced a new “full expensing” policy for the next three years under which businesses can deduct 100 per cent of the cost of capital spending for certain plant and machinery against taxable profits, cutting their overall tax bill. – The Times
Goldman Sachs is facing scrutiny over its dealings with Silicon Valley Bank in the days before the technology lender’s collapse last week. The Wall Street investment banking group is set to make tens of millions of dollars from its purchase of a vast bond portfolio from Silicon Valley Bank . The California-based lender booked a $1.8 billion loss on the transaction, helping to set the stage for its failure. – The Times
