European shares rose in early trading on Monday after Swiss bank UBS bought Credit Suisse in a bailout that did little to allay investor doubts about the soundness of the banking system.
After the morning drop, European indices rose slightly, with the Paris Stock Exchange up 0.14% and the Frankfurt and London indices up 0.04% by 10:00 am.
In the early hours of the morning, the most famous financial exchanges in Europe fell in early trading sessions on Monday, with the most prominent index of the London Stock Exchange falling 1.1%, to 7,258.31 points.
In the Euro Zone, the Frankfurt stock index fell 1.0% to 14,617.00 points, while the Paris stock index fell 0.8% to 6,868.51 points.
Morning stocks in Standard Chartered and HSBC fell more than 6% in Hong Kong Monday to their lowest level in more than two months, as HSBC faces the possibility of its biggest one-day decline in six months. . The “MSCI” index of financial stocks in Asia excluding Japan fell 1.3%.
In a Swiss regulatory package, UBS said on Sunday it would pay CHF3 billion ($3.23 billion) to buy 167-year-old Credit Suisse, taking a stake of up to $5.4 billion.
Facing a rapidly spreading crisis of confidence in the financial system, major central banks also sought on Sunday to boost liquidity flows into the global banking system through a series of coordinated currency swaps to ensure banks have access to they need to operate. .
While the moves appeared to boost investor confidence in early Asian trading, the rally quickly faded as focus turned to the huge losses some holders of Credit Suisse bonds would suffer.
Under the deal, Switzerland’s financial regulator decided to zero out the value of Credit Suisse’s additional $17 billion in senior bonds, angering some bondholders who thought they could get more. protection of what shareholders receive in a takeover agreement. It was announced yesterday.
Concerns about what the move could mean for additional senior bonds issued by other banks added to worries about a range of risks, including the crisis spreading to the banking sector, weakness in US banks and moral hazard.
I am Ben Stock, a highly experienced professional with over 7 years of experience in the news industry. I specialize in market section writing and have published numerous high-quality articles on various topics under my name. My passion for journalism has helped me to develop an in-depth understanding of the industry, enabling me to stay up-to-date on all the latest trends and developments.