European stocks gain on credit suisse shares rise: market rally

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(Bloomberg) — European shares staged a partial rebound on Thursday as Group AG said it would borrow money from Switzerland’s central bank and try to repay debt.

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The Stoxx Europe 600 index climbed 0.8% after falling nearly 3% yesterday as news from provided a measure of calm for jittery investors. A gauge of bank shares climbed 2%, recovering from yesterday’s 6.9% loss. Shares of Credit Suisse climbed as much as 40%. The embattled Swiss lender has made arrangements to borrow up to 50 billion francs ($54 billion) from the Swiss National Bank’s liquidity facility and will offer to buy back billion francs worth of dollar- and euro-denominated debt.

The Swiss franc rebounded on the news in volatile trade after a sharp selloff on Wednesday. The euro strengthened ahead of an expected interest rate hike by the European Central Bank later Thursday, with more investors now in position to double down after earlier expectations for a move of 25 basis points.

Treasury 10-year yields edged higher after a sharp decline in the previous session. Bonds rose across Europe, with the German 10-year yield rising 10 basis points. The dollar index fell.

Contracts for the S&P 500 traded little changed on Wednesday after the index fell 0.7%. Tech stocks offered one bright spot as traders began predicting lower interest rates than previously expected. Nasdaq 100 futures advanced on Thursday as the benchmark posted a third day of gains on Wednesday as Netflix Inc, Meta Platforms Inc, Microsoft Corp, and Inc.

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A selloff in bank stocks dragged the KBW Bank index, one of the broadest measures of the US banking system, down more than 3% on Wednesday. Shares of First Republic Bank fell more than a fifth after two credit firms cut them to junk, stretching last week’s decline to more than 70%.

Traders were almost evenly divided on whether the Federal Reserve would hike interest rates when it meets next week. Market pricing now suggests the will soon pivot and cut rates by 1% by the end of the year.

“This episode is not like 2008. It’s not a credit crisis, it’s an asset crisis,” said Nicolas Fares, chief investment officer at Vantage Point Asset Management. “The challenge that has emerged now is the mark-to-market fantasy of venture capital, private equity and commercial real estate.”

In other markets, oil rose from its lowest in 15 months after a -day rout triggered by the US banking crisis and options-covering accelerated. Copper and aluminum also rise Gold is trading near the highest level of six weeks.

Major events of the week:

  • Eurozone Rate Decision, Thursday

  • US housing starts, initial jobless claims, Thursday

  • Janet Yellen appears before the Senate Finance Committee on Thursday

  • US University of Michigan Consumer Sentiment, Industrial Production, Conference Board Leading Index, Friday

Some key moves in the markets:


  • The Stoxx Europe 600 was up 0.8% as of 8:26 a.m. London time

  • S&P 500 futures rose 0.1%

  • Nasdaq 100 futures rose 0.4%

  • Futures on the Dow Jones Industrial Average were little changed.

  • MSCI Asia Pacific index fell 1%

  • MSCI Emerging Markets Index fell 0.7%

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  • The Bloomberg Dollar Spot Index fell 0.2%

  • The euro rose 0.4% to $1.0622

  • The Japanese yen rose 0.5% to 132.69 per dollar

  • The offshore yuan fell 0.1% to 6.9023 per dollar

  • The British pound rose 0.3% to $1.2097


  • Bitcoin rose 1.2% to $24,671.96

  • Ether rose 0.2% to $1,656.99


  • The yield on 10-year Treasuries rose two basis points to 3.48%

  • Germany’s 10-year yield rose 10 basis points to 2.23%

  • UK 10-year yield rose seven basis points to 3.39%


This story was produced with assistance from Bloomberg Automation.

–With assistance from Richard Henderson.

(An earlier version of this story was corrected to reflect that is looking to buy back the debt.)

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