London open: FTSE gains as bank shares recover

Mon 27 Mar 2023

LONDON (SHARECAST) - (Sharecast News) - London stocks rose in early trade on Monday, with banks pacing the advance following heavy losses at the end of last week.
At 0830 BST, the FTSE 100 was up 1.1% at 7,483.23.

Sentiment got a boost after First Citizens Bank agreed to buy the deposits and loans of collapsed Silicon Valley Bank from US regulator the Federal Deposit Insurance Corporation (FDIC).

As of 10 March, Silicon Valley Bridge Bank, National Association, had around $167bn in total assets and $119bn in total deposits.

The FDIC, which took over SVB earlier this month, said in a statement that the transaction includes the purchase of around $72bn of Silicon Valley Bridge Bank's assets at a discount of $16.5bn.

The FDIC created Silicon Valley Bridge Bank earlier this month following the closure of SVB by the California Department of Financial Protection and Innovation.

Approximately $90bn in securities and other assets will remain in the receivership for disposition by the FDIC. In addition, the FDIC said it received equity appreciation rights in First Citizens BancShares common stock with a potential value of up to $500m.

First Citizens will open the 17 former branches of Silicon Valley Bridge Bank as First Citizens banks on Monday.

The UK arm of SVB was purchased by HSBC two weeks ago for 1.

In equity markets, Barclays, Lloyds, Standard Chartered and NatWest were among the top performers on the FTSE 100, having tumbled on Friday after a spike in Deutsche Bank credit default swaps reignited banking sector fears.

Victoria Scholar, head of investment at Interactive Investor, said: "The placatory deal for SVB has helped to calm market skittishness after the recent sthenic price action. Banks are outperforming at the European open with Deutsche Bank up by more than 6.5% and Credit Suisse up by over 2.5%.

"Commerzbank, Societe Generale and BNP Paribas are also bouncing on Monday. But there is a long way to go to recoup losses with Deutsche Bank still down over 17% year-to-date.

"A key underlying driver of the recent market maelstrom has been the sea change in monetary policy after the punchbowl of cheap money was removed. Central banks have been desperately scrambling to keep a lid on spiralling inflation rates with an abrupt ending to the era of rock bottom interest rates which had underpinned asset price growth and long helped businesses to thrive."

Market Movers

FTSE 100 (UKX) 7,483.23 1.05%
FTSE 250 (MCX) 18,646.58 0.83%
techMARK (TASX) 4,536.55 0.70%

FTSE 100 - Risers

Barclays (BARC) 138.54p 3.47%
BP (BP.) 499.60p 2.73%
Lloyds Banking Group (LLOY) 46.76p 2.29%
NATWEST GROUP (NWG) 264.30p 2.24%
Prudential (PRU) 1,046.50p 2.20%
Standard Chartered (STAN) 604.20p 2.10%
3i Group (III) 1,574.50p 2.07%
Ashtead Group (AHT) 4,831.00p 1.98%
Aviva (AV.) 416.30p 1.96%
Abrdn (ABDN) 206.40p 1.93%

FTSE 100 - Fallers

Endeavour Mining (EDV) 1,840.00p -1.08%
Fresnillo (FRES) 727.00p -0.76%
Diageo (DGE) 3,589.50p -0.26%
National Grid (NG.) 1,058.00p -0.05%
London Stock Exchange Group (LSEG) 7,754.00p 0.05%
Severn Trent (SVT) 2,818.00p 0.07%
United Utilities Group (UU.) 1,041.00p 0.10%
Rentokil Initial (RTO) 567.20p 0.14%
BT Group (BT.A) 139.95p 0.14%
B&M European Value Retail S.A. (DI) (BME) 465.60p 0.15%

FTSE 250 - Risers

Bytes Technology Group (BYIT) 391.80p 4.93%
Harbour Energy (HBR) 257.10p 4.85%
Aston Martin Lagonda Global Holdings (AML) 221.70p 4.18%
4Imprint Group (FOUR) 5,170.00p 3.61%
National Express Group (NEX) 121.40p 3.32%
IWG (IWG) 149.00p 3.19%
OSB Group (OSB) 466.00p 2.64%
Hipgnosis Songs Fund Limited NPV (SONG) 82.00p 2.50%
ASOS (ASC) 764.00p 2.48%
Virgin Money UK (VMUK) 142.75p 2.48%

FTSE 250 - Fallers

International Distributions Services (IDS) 227.00p -1.48%
Fidelity China Special Situations (FCSS) 245.00p -1.01%
Baltic Classifieds Group (BCG) 153.60p -0.90%
Darktrace (DARK) 260.30p -0.88%
JTC (JTC) 659.00p -0.60%
TUI AG Reg Shs (DI) (TUI) 1,372.00p -0.58%
TR Property Inv Trust (TRY) 273.00p -0.55%
Capital Gearing Trust (CGT) 4,685.00p -0.43%
Mediclinic International (MDC) 497.40p -0.40%
Centamin (DI) (CEY) 103.05p -0.39%
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