After ECB interest rate hike, bank stocks rise significantly

EEurope's banks are in investors' favor after historic rate hike European Central Bank (ECB) by 0.75 percentage points in stock trading on Thursday. The European sector index extends its gains to a plus of 1.3 percent. Commerzbank's share price rose by 5.0 percent, while Deutsche Bank's stock rose by 3.4 percent. The euro gave way slightly and is hovering around the $1,000 mark, the so-called parity.

On the bond market, yields on ten-year federal paper rose to 1.62 percent. The yield difference (spread) between them and their Italian counterparts narrows slightly to 2.21 percentage points. Of the dax loses 1.2 percent to 12,764 points. The index had already been lower before the ECB interest rate decision.

For Jörg Zeuner, chief economist at Union Investment, the interest rate hike by the ECB underscores the seriousness of the situation. He pointed to rising energy prices, which are driving inflation to new heights. This is putting massive pressure on the ECB and forcing it to Interest charges to increase faster and more powerfully than you could have dreamed of at the beginning of this year, said Zeuner, the chief economist of the fund company of the Volks- und Raiffeisenbanken.

"It's better for the economy if the ECB hikes rates quickly rather than stretching the brakes and uncertainty for a long time," he said Michael Heize, chief economist at wealth manager HQ Trust. According to him, together with an expected weak economy, rising interest rate expectations speak for a volatile development of the stock markets. New course fantasy will probably only arise when it becomes foreseeable that the inflation rates will drop significantly. "That can probably be expected around the turn of the year," expects Heise.

Source link