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Europe close: Stocks rally as banking fears subside; UBS in the black

By Michele Maatouk

Date: Wednesday 29 Mar 2023

(Sharecast News) - European stocks ended firmly in the black on Wednesday as fears of a fully-blown banking crisis abated, although shares in Atos plunged after Airbus said that it will no longer chase a minority stake in its Evidian business.
The pan-regional Stoxx 600 index closed up 1.3% at 450.21, while France's CAC 40 ended 1.4% higher and Germany's DAX finished 1.2% firmer.

Chris Beauchamp, chief market analyst at IG, said: "Stocks have made further gains today after a mixed session yesterday, and the continued absence of any fresh banking crisis is another big tick in the risk-on column."

Investors were digesting the latest survey from market research group GfK, which showed that German consumer sentiment was expected to improve in April.

GfK's forward-looking consumer sentiment index for April rose to -29.5 from a revised -30.6 in March, coming in a touch below consensus expectations of -29.2.

The headline expectations index fell to 3.7 from 6.0,while the income expectations index improved to -24.3 from -27.3. The propensity to buy index ticked up -17.0 from -17.3.

Rolf Bürkl, GfK consumer expert, said: "Income expectations are currently benefiting from the recent noticeable drop in energy prices, especially for gas and heating oil. Nevertheless, inflation will remain high this year, even if it will be somewhat lower than the 6.9% measured in 2022 according to the forecasts available so far.

"The expected loss of purchasing power is preventing a sustained recovery in domestic demand. Accordingly, private consumption is unlikely to make a positive contribution to economic growth in Germany this year. This is also signalled by the still very low level of consumer sentiment."

In corporate news, UBS gained after the Swiss banking giant said it had rehired Sergio Ermotti as chief executive to help steer its $3.2bn takeover of scandal-hit rival Credit Suisse.

Elsewhere, shipping giant Maersk advanced after the company said supply chain constraints after the Covid-19 pandemic had stabilised.

Shares in Infineon surged after the German chipmaker raised its outlook for both its financial second quarter and full-year 2023, citing resilience in its automotive and industrials divisions.

On the downside, Atos tumbled after Airbus opted against taking a stake in the French tech firm's Evidian cybersecurity business.

UK fashion retailer Next slumped after it posted a better-than-expected jump in full-year profit and said selling price inflation was set to be more benign than previously thought, but warned the year ahead will be "difficult" and that it continues to expect a decline in profit.


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