Early Morning Call: European equity markets pursue their rebound as fears of banking crisis ease

Equity markets rebound

Equity markets rebounded around the world as fears of a banking crisis eased.

US regional banks that have been severely hit after Silicon Valley Bank (SVB) collapsed pared some of their losses in yesterday's session. First Republic Bank rose 27%, PacWest Bancorp 33%, and Western Alliance 14%.

Major US banks, all-session stocks on the IG platform, also rose yesterday: Wells Fargo ended the session up 5.1%, Citigroup 6%, JPMorgan, affected to a lesser extent in the previous days, rose 2.7%.

The US dollar seems to have found some support on the currency market. And gold has stabilised around the $1,900 mark.

Chinese data

In China, the latest data points to an uneven economic recovery. Industrial production rose 2.4% in the January-February period year-on-year (YoY), missing expectations for a 2.6% gain.

Retail sales rebounded after three months of decline. The index rose 3.5% in the first two months from a year before. The result was in line with analysts' expectations.

Fixed asset investment grew much faster in the first two months of the year, 5.5% higher than a year earlier, compared with a forecast of a 4.4% rise.

Spring budget

In the UK, the Chancellor of the Exchequer is due to present to the House of Commons his Spring budget at 12.30pm. Measures to be announced are intended to boost investment, and offset tax changes that will take effect next month. Jeremy Hunt has already said he will stick to his plan to increase corporation tax to 25%.

Job vacancies is another issue he wants to tackle. There are currently 1.1 million vacancies in the British labour market. Cost of living will also be addressed as fuel duty should be kept down, and the £2,500 energy price guarantee should be extended.

Across the Atlantic, US retail sales are expected to fall 0.3% in February month-on-month (MoM), and producer price index (PPI) is expected to rise 0.3% in February MoM, +5.4% YoY.

Elsewhere, Prudential said its operating profit rose 8% in 2022 to $3.38 billion. The result beat a forecast of around $3.34bn. The insurer has now completed the move of its entire senior management team from London to its new global headquarters in Hong Kong.

Balfour Beatty posted a full-year (FY) pretax profit of £287 million, and an 8% increase of its order book, giving the group more visibility in the short and medium terms.

In the US, investors await Adobe's quarterly earnings. Earnings are forecast at $3.68 per share and revenue at $4.62bn.

Commodities

OPEC has upgraded oil demand from China. It helped arrest a slide that saw oil prices hit new lows for the year.

Crude oil inventories increased by 1.15 million barrels last week according to the API, taking the rise to more than 56 million barrels so far this year.

Gasoline stocks fell by 4.59 million barrels and distillates by 2.89 million barrels.