European Shares Seen Flat To Higher As Bank Bailouts Lift Risk Sentiment

European stocks may open on a steady note Friday as multi-billion-dollar lifelines for troubled U.S. and European banks shored up investor confidence.

After the European Central Bank (ECB) raised rates as planned, markets now bet on less hawkish Fed.

Amid mounting economic uncertainty, the U.S. central bank is expected to hike rates by a smaller 25 basis points at the conclusion of its two-day policy meeting on March 22.

The Bank of England’s rate decision may also be overshadowed by market turmoil.

Asian stocks traded broadly higher, with Chinese, Hong Kong and Japanese markets leading regional gains.

The dollar slipped on improved risk sentiment, helping gold prices push higher to $1,930 levels.

Oil prices rose about 1 percent to extend gains from the previous session after reports emerged that Russia and Saudi Arabia are discussing production cuts.

Final consumer price data from the euro area will be out later in the session, headlining a light day for the European economic news.

Across the Atlantic, trading may be impacted by reaction to reports on industrial production and consumer sentiment, with the latter including readings on inflation expectations.

U.S. stocks posted strong gains overnight after reports emerged that JPMorgan Chase (JPM), Morgan Stanley (MS) and several other big banks would work together to shore up First Republic Bank with a $30bn deposit.

The tech-heavy Nasdaq Composite jumped 2.5 percent to end higher for the fourth straight session, while the Dow rose 1.2 percent and the S&P 500 added 1.8 percent.

European stocks closed higher on Thursday as news of liquidity support to Credit Suisse by the Swiss central bank helped ease some of the worries about a global banking crisis.

The European Central Bank called Europe’s banks “resilient” and promised liquidity support, if needed, after raising rates by 50 basis points.

The pan European STOXX 600 rallied 1.2 percent. The German DAX climbed 1.6 percent, France’s CAC 40 surged 2 percent and the U.K.’s FTSE 100 gained 0.9 percent.

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