FTSE 100 tumbles; banks slide as credit default swaps spike

© Reuters. FTSE 100 tumbles; banks slide as credit default swaps spike

Proactive Investors -

• FTSE 100 tumbles as banks fall on contagion fears
• Credit default swap prices spike in a number of European banks
• Deutsche Bank (ETR:DBKGn) tumbles 11%, Commerzbank (ETR:CBKG) 8%, Barclays (LON:BARC) 6%

GSK shares fall after Californian ruling

Shares in GSK fell 3.6% after it said it "t "respectfully disagrees" with a ruling by a California state court in litigation related to claims that the company's heartburn drug, Zantac, caused cancer.

The pharma giant said the scientific consensus is that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer.

GSK added the litigation is still at an early stage and yesterday's decision relates only to the question of whether the plaintiff's experts can testify at trial in the Goetz case.

It does not mean that the Court agrees with plaintiff's experts' scientific conclusions or their litigation-driven science. GSK will press additional defences and the plaintiff still needs to prove his case at trial.

This ruling does not affect other state cases or the December 2022 Daubert ruling made in the federal Multi-District Litigation, the company added.

European markets slip further

The slide in European markets shows no signs of abating. Banking shares prices have extended falls on fresh contagion fears after a spike in credit default pricing for a number of leading European banks.

In London, NatWest (LON:NWG), Barclays and Standard Chartered (LON:STAN) top the FTSE 100 fallers down 5.4%, 5.1% and 5% respectively dragging the index down by 2.1%.

???? The #CDS spread of some European Banks has now surpassed the level seen during the UK Mini Budget Crisis!

Banking jitters on the European side of the Atlantic are flaring up again.

Markets will likely seek the next weakest link after #CreditSuisse pic.twitter.com/eR76Crsml0

— jeroen blokland (@jsblokland) March 24, 2023

In Europe, the Dax is down 1.9% and the CAC 40 down 2%.

Deutsche Bank is facing the biggest falls, now down more than 11%. Commerzbank is 8.2% lower, Unicredit (BIT:CRDI) has fallen 5.2%, Societe Generale (EPA:SOGN) has slid 6.9% and BNP Paribas (EPA:BNPP) 5.2%.

Eurozone PMI grows, beats expectations

Obver in Europe and Eurozone business activity expanded faster than expected in March, driven by growth in the services sector, indicating that an economic rebound from last year’s energy crisis is yet to be dented by recent banking turmoil.

S&P Global’s flash eurozone composite purchasing managers’ index, a measure of activity in manufacturing and services, rose to a 10-month high of 54.1 in March from 52 in the previous month.

#Eurozone flash PMI pointed to stronger #growth in the private sector economy in March, as output rose at the fastest pace since May 2022 (headline #PMI at 54.1; Feb: 52.0) and manufacturing costs fell sharply. Read more: https://t.co/ptuo0DczgZ pic.twitter.com/SSuMrylnGS

— S&P Global PMI™ (@SPGlobalPMI) March 24, 2023

The result was higher than the 51.9 expected by economists. It was also above the 50 mark for the third month in a row, meaning a majority of businesses in the 20-country bloc reported an increase in their activity from the previous month.

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