The European Stoxx 600 index rose 0.7 percent by 0708 GMT, continuing the rise for the second day in a row after last week’s losses in bank shares that resulted from the collapse of Credit Suisse and two medium-sized US banks.
The European banking sector index rose 1.6 percent, after rising 1.4 percent on Monday.
Ray Attrell, head of foreign exchange strategy at National Australia Bank, said the acquisition by First Citizens “helped set a positive tone” in global markets.
“Along with the absence of fresh horror stories over the weekend, banking stocks led higher across most of the major stock indices,” he wrote in a note.
Shares in Swiss bank UBS jumped 2.4 percent after Chief Executive Ralf Hammers said in an internal note seen by Reuters that the bank saw its acquisition of Credit Suisse, which was overseen by Swiss authorities, as an opportunity for growth.
Credit Suisse shares rose 3.1 percent.
On the other hand, the World Bank warned Monday that the expected economic slowdown in China is likely to drag global growth to its lowest level this century as it proposed measures to prevent a “lost decade” of growth.
“We are used to China being the primary driver of the global economy, and that must change because China’s growth rate will decline over time,” said Indermit Gill, chief economist of the World Bank.
While the markets have responded positively to the measures implemented by the authorities to support the banking sector, there are still concerns about the impact of continued interest rate increases by central banks, especially the US Federal Reserve.
Despite the recent turmoil, central banks continued to tighten monetary policy with their focus on combating inflation.
However, according to the BlackRock Investment Institute, these anti-inflationary campaigns are beginning to ease.
Bloomberg quoted the BlackRock Institute as saying: “We see the major central banks moving away from the “whatever it takes” approach, stopping their hikes and entering a more delicate stage that is not related to a relentless battle against inflation, but at the same time they are still in a stage that they cannot reduce prices. Benefit”.
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