Proactive Investors - The FTSE 100 opened higher, as confidence returned on Credit Suisse’s announcement it would borrow almost US$54bn from the Swiss central bank to shore up its finances.
It had prompted banking shares to spiral on Wednesday, after key investor Saudi National Bank warned it could no longer prop up the bank, seeing its Credit Suisse stock repeatedly suspended from trading.
Deliveroo narrowed its annual losses to £45mln in 2022, down from £100mln a year earlier, adding it was on course for improved earnings this year.
Halma also hinted it was on course to meet expectations, explaining it had made good progress so far in 2023 and would likely strike a £359.9mln pre-tax profit for the full-year.
Virgin Orbit was less upbeat though, announcing it was pausing all operations for at least a week and furloughing staff, as it looks for a new investment plan to battle financial woes.
And with the small caps, researcher hVIVO rose 2% after announcing it had successfully manufactured its Omincron human challenge agent.
Footsie in recovery mode
After copping a nearly 4% beating on Wednesday, it feels like the only way is up for the UK lead index.
Footsie has managed to recover 1.2% to 7,435 in the early morning session, with a fair chunk of the recovery emerging from battered banking stocks, namely Barclays (LON:BARC), Lloyds and HSBC.
Rentokil’s dividend boost announced today has sent the pest control kings to the top of the FTSE 100 table, adding 7% to 537p in early trades.
Helios Towers is also coming off strong from its full-year earnings call, adding around 6% after underscoring a 25% year-on-year revenue increase and 18% adjusted EBITDA increase.
The headlines are undoubtedly focused on Credit Suisse following yesterday’s dramatic trading halt. The beleaguered bank has taken out a £45.5bn loan from the Swiss central bank to reinforce the group's balance sheet after yesterday’s plunge.
"My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs," said chief executive Ulrich Koerner.
In the European markets, Frankfurt has added 1.1% to 14,900 while Paris is up 1.3% to 6,974.
Bitcoin has been one of the benefactors of the latest round of market instability, and it remains steady at US$24,600 today, having added 1.3% in the past 24 hours.
But digital gold isn’t as strong as real gold, which remains near record highs of £1,590 an ounce.
Looking ahead, today we have the ECB’s interest rate decision, the first of the major central banks to do so in the midst of a genuine banking crisis.
Previous pricing in a 50bps hike, the market has readjusted its expectations down to 24bps, perhaps even zilch. We’ll find out this afternoon.
FTSE 100 opens higher
Footsie has opened 0.9% higher at 7,409, but after yesterday’s brutal session, accumulated year-to-date gains remain wiped out.
Banking stocks are enjoying some recovery this morning, with Barclays PLC up 3%, HSBC Holdings PLC up 2.9% and Lloyds Banking Group PLC around 2.6% higher.
NatWest, on the other hand, is still in the red.
“The next few days will be critical in determining sentiment with no news being good news within the banking sector, where it is still hoped that the twin issues seen so far are not only different but isolated and contained,” said Richard Hunter, head of markets at interactive investor.
Pound, euro strengthen against dollar
The pound sterling added 20 pips against the dollar during this morning’s Asia trading session, bringing the pair to 1,209, though Cable bulls still have work to do before recapturing yesterday’s 84 pip losses.
The euro also strengthened against the dollar, adding 45 pips to 1.062 following yesterday’s 1.4% stumble.
EUR/GBP is nearly 0.2% higher this morning following yesterday’s 0.7% drop.
Chancellor Jeremy Hunt’s Budget, short on surprises and overshadowed by the banking meltdown as it was, is unlikely to be influencing the forex markets in any particular way
Traders are more likely to react to the ECB’s interest rate decision this afternoon. A 50bps hike, which is considerably less likely than it was a week ago, would galvanise the euro bulls, but they’re unlikely to get what they want.