Dax turns positive after initial losses
Dhe fear of contagion effects in view of the troubled Credit Suisse temporarily weighed heavily on the share prices of major European banks on Monday. At the beginning of the week, Deutsche Bank titles fell by more than 7 percent in price, and Commerzbank by a good 5 percent. Later, the courses of both showed little change.
The dax lost by up to 2 percent to 14,458 points on Monday morning, but recovered quickly with slight losses. Later, the German selection index even turned positive. In the late afternoon, the Dax was up 1.1 percent to 14,926 points. After the takeover by UBS, the Credit Suisse share price temporarily fell by 64 percent, later the minus amounted to 53 percent. The UBS share itself temporarily lost 11 percent on the stock exchange, later gaining more than 2 percent. The Swiss stock index SMI initially fell more significantly and was finally slightly up in the afternoon.
Investors, on the other hand, were initially looking for security. And so German Bunds started the week on Monday with strong price gains. The trend-setting futures contract Euro Bund Future rose sharply in the morning by 1.07 percent to 139.44 points. In return, the yield on ten-year Bunds fell below the 2 percent mark. Profits later crumbled again, the return rose to around 2.1 percent. Other government bonds in the euro area were also in demand at times.
Gold prices continued to rise amid the turmoil on Monday, breaching the $2,000 mark. An ounce (31.1 grams) cost $2009.73 at one point, but the price then fell back to around $1980. Since the closure of the Silicon Valley Bank in the USA ten days ago, the price of gold has risen significantly at times. Gold is considered a safe investment. The price had already exceeded $2,000 twice in the past few years: in the summer of 2020 because of the corona pandemic and in March 2022 in the first weeks of the Russian war of aggression in Ukraine.
The financial regulator Bafin continues to believe that the German financial system is resilient after the rescue operation for the major Swiss bank Credit Suisse. “The German financial system continues to be stable and robust,” said a spokesman for the Federal Financial Supervisory Authority (Bafin) on Monday. Bafin keeps an eye on current market developments and takes them into account as part of its ongoing supervision.
The banking supervisory authority of the European Central Bank (ECB) also assured on Monday that the European banking system was “resilient”. The ECB announced in Frankfurt that the institutions’ capital resources and liquidity were “robust”. The Central Bank’s Banking Supervision is responsible for 113 significant banks in the euro area.
“French banks are solid”
“The stock exchanges are trying to evaluate and praise the rescue of Credit Suisse,” said portfolio manager Thomas Altmann from asset manager QC Partners. On the positive side, it is quite clear that the authorities are doing everything they can to help banks like Credit Suisse and secure deposits. On the other hand, investors can see how quickly shares in troubled banks can become almost completely worthless.
France’s central bank chief Francois Villeroy de Galhau comments after the rescue operation for the CreditSuisse confident about the stability of the French financial institutions. “To put it bluntly once again: French banks are solid,” the European Central Bank (ECB) councilor told the daily Le Monde.
The French banking sector is concentrated around six large banks. Villeroy said they all have solid and profitable business models, strict risk controls and a high degree of regulatory compliance. And he added: “As for Credit Suisse, this is a bank that has had problems with its business model and profitability for several years, as well as with insufficient internal controls.” the UBS to bind. That is a welcome solution.
Most of the major Asian stock exchanges fell on Monday. However, the losses were limited after it had already gone downhill significantly in the past week. Japan’s Nikkei 225 closed 1.4 percent lower at 26,946 points on Monday. The situation was similar for the Australian S&P ASX 200, which ended trading 1.4 percent down at 6899 points. The Hang Seng index of the Chinese special administrative region of Hong Kong, where foreign investors are also allowed to trade, recently even fell by 3.37 percent to 18,861 points. The mood for the banks remains shaky: shares in Hong Kong-listed bank HSBC lost more than 6.5 percent.
However, the CSI 300 index with the 300 most important values of the trading venues held up comparatively well Shanghai and Shenzhen, which had recently lost less than the other indices. It only gave way by 0.50 percent to 3939 points. The stock market barometer benefited from the fact that the Chinese central bank surprisingly lowered the minimum reserve ratio for domestic banks on Friday.