The FTSE 100 rebounded at the start of the week, as worries over a global banking crisis eased somewhat after a deal was agreed for a US bank to take over the assets of failed Silicon Valley Bank.
The FTSE 100 index closed up 66.32 points, 0.9%, at 7,471.77 on Monday in London. The FTSE 250 rose 35.79 points, 0.2%, at 18,529.62, though the AIM All-Share ended down 1.94 points, 02%, at 798.48.
The Cboe UK 100 ended up 1.1% at 748.02, the Cboe UK 250 added 0.4% at 16,127.05, and the Cboe Small Companies rose 0.5% to 13,294.34.
In mainland Europe, the CAC 40 in Paris closed up 0.9%, while the DAX 40 in Frankfurt rallied 1.1%.
New York-listed First Citizens on Monday said it has agreed to purchase all loans and deposits from Silicon Valley Bank, whose collapse this month sparked global fears about the sector.
SVB, a key lender to the tech industry since the 1980s, became the biggest US bank to fail since 2008 when regulators seized it after a sudden run on deposits. Regulators created Silicon Valley Bridge Bank from SVB after the collapse, and that entity will be taken over by First Citizens from Monday.
Regulators created Silicon Valley Bridge Bank from SVB after the collapse, and that entity will be taken over by First Citizens.
First Citizens shares shot up 47% in New York.
Wider markets across the Atlantic were largely on the up. The Dow Jones Industrial Average rose 0.6% and the S&P 500 added 0.3%, though the Nasdaq Composite lost 0.2%.
Among banking shares in Europe, Barclays and Lloyds rose 2.3% and 1.3%, respectively, in London, while Deutsche Bank added 6.3%. The Frankfurt listing was at the heart of Friday’s turmoil, though shares in the lender recovered some ground on Monday.
‘Many investors still don’t want to touch the banking sector for fears there is more distress to come. Yet for every bleak situation there is always someone who sees an opportunity to make money, hence why we’re seeing a rise in the share price of many European banks today,’ AJ Bell analyst Russ Mould commented.
Sterling was quoted at $1.2268 at the time of the London equities close on Monday, up from $1.2222 on Friday. The euro traded at $1.0782, up from $1.0753.
During largely tough trade for safe haven assets, the Japanese yen and gold struggled. Against the yen, the dollar was quoted at JP¥131.50, up versus JP¥130.69.
Gold was quoted at $1,956.69 an ounce, down from $1,984.10.
Shares in gold miners Fresnillo and Centamin fell 1.5% and 4.0% in London.
While gold prices fell, oil was on the up. Brent oil was quoted at $75.91 a barrel late Monday in London, up from $74.07 late Friday.
In London, Harbour Energy shares bounced 4.5%, among the best FTSE 250-listed performers.
CMC Markets plunged 21%. It warned that February and March posed a more ‘challenging environment’ with lower equity volumes and a higher proportion of lower margin institutional business.
The London-based provider of an online retail and institutional trading platform forecast financial year 2023 net operating income between £280 million and £290 million.
Elsewhere in London, Pressure Technologies rose 4.8%. The specialist engineering group said its subsidiary AI-Met, a part of the Precision Machined Components division, won a £3 million order from a ‘established international [original equipment manufacturer] customer’.
The company says the order is ‘unprecedented’ and will provide ‘substantial order book coverage and visibility’ for the first half of financial 2023.
Scotgold slumped 63%. The gold producer says gold grades at 430 West ore drive declined ‘significantly’ in late February and early March, reducing total ore production.
‘The 430 West ore drive turned to waste, contradicting the grade control model,’ ScotGold said.
It warned of a ‘material uncertainty’ that could exist if the commencement of long hole stope mining is delayed and ore mining continues to be below the mine plan.
In order to strengthen its cash position, Scotgold is discussing a $500,000 advance with its gold offtake partner to assist with short-term working capital. The directors are also mulling a short-term convertible loan.
Focus later on Monday will be on Bank of England Governor Andrew Bailey who speaks at the London School of Economics at 1800 BST. He speaks before the UK’s Treasury Committee at 0945 BST on Tuesday.
Tuesday also has a US consumer confidence survey at 1500 BST, after a house price index reading at 1400 BST.
London’s corporate diary has annual results from Iru-Bru maker AG Barr, an interim report from housebuilder Bellway and a trading statement from online grocer Ocado.
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