The Dow Jones closed more than 130 points higher on Friday, while the S&P 500 and the Nasdaq added nearly 0.6% and 0.3%, respectively. The upward movement came in while the concerns about the stability of banks still persist. Deutsche Bank’s US-listed shares were down only 3.1% rebounding from a 14% decline earlier in the session. In the morning, DB said it would redeem $1.5 billion in a set of tier 2 notes due in 2028 creating a market panic and pushing banking stocks in Europe sharply lower. ECB President Christine Lagarde tried to ease concerns by telling EU leaders the euro area banking sector was resilient and that the central bank toolkit was equipped to provide liquidity to the financial system if needed. For the week, the three major averages are set to book gains. For the week, the Dow edged up by 0.1%, while the S&P 500 and the Nasdaq gained 1% and 2.1%, respectively.
European equity market fell on Friday, extending the previous session's decline, as concerns over the health of the banking sector mounted. The benchmark Stoxx 600 lost 1.4% and the Stoxx bank index declined 3.8%, with shares of Deutsche Bank down by over 3% after falling as much as 15% earlier in the session. In the morning, DB said it would redeem $1.5 billion in a set of tier 2 notes due in 2028 creating a market panic and pushing its credit default swaps to the highest since their introduction in 2019. ECB President Lagarde tried to ease concerns by telling EU leaders the euro area banking sector was resilient and that the central bank toolkit was equipped to provide liquidity to the financial system if needed. Meanwhile, flash PMI data for March showed services sector in France, Germany and the Euro Area grew at a much faster pace than initially anticipated while the manufacturing sector surprised on the downside. On the week, however, both the DAX and the STOXX 600 were up.
The BSE Sensex extended early losses to close 360 points lower at 57,570 on Friday, notching a near 1% drop on the week to its lowest in over five months, pressured by renewed selling activity for banks and raw-material shares. The fall mirrored the pullback in sentiment for equities worldwide, after the US DoJ launched a probe against UBS and Credit Suisse for aiding Russian Oligarchs while German banks declined to exercise a call option on AT1 bonds due to recent plunges in prices of the risky bond. The developments come on top of US Treasury Secretary Yellen’s comments that the government will not insure all deposits in the country’s banking system. Bajaj Finserv sank 4% while Bajaj Finance and the State Bank of India sank 3.3% and 1.4%, respectively. Aggressive declines for base metals in China also impacted Indian equities, as Tata Steel shares dropped nearly 3%.
The Shanghai Composite fell 0.64% to close at 3,266 while the Shenzhen Component rose 0.25% to 11,634 in mixed trade on Friday, as brewing Sino-US tensions weighed on sentiment. US lawmakers recently interrogated TikTok’s CEO about potential Chinese influence over the platform, while China’s military said it had driven away a US destroyer that entered waters around the Paracel Islands in the South China Sea. Investors also contended with tightening monetary conditions in other major economies and lingering concerns about the global banking crisis. Telecommunications stocks led the losses, including China Telecom (-4.1%), ZTE Corp (-3.6%) and China Mobile (-2.2%). Meanwhile, technology stocks extended their recent outperformance, with strong gains from Inspur Electronic (5.4%), iFLYTEK (5.6%) and Unigroup Guoxin (1.6%).
The S&P/ASX 200 Index fell 0.19% to close at 6,955 on Friday and posted its seventh straight weekly decline, having faced pressure since early February from higher interest rates, global economic uncertainties and the recent banking turmoil. Investors also digested data showing Australian manufacturing and services activities turned contractionary in March. Technology stocks led the decline, with losses sharp from Xero (-1.3%) and Weebit Nano (-9.8%). Block Inc also plunged 18.5% following a Hindenburg Research report alleging the payments company ignored widespread fraud. Financial stocks tumbled as well, including Macquarie Group (-0.7%), Commonwealth Bank (-1.6%), NAB (-2%), ANZ Group (-1%) and Westpac Banking (-0.7%).