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The FTSE and European markets have jumped at the open following news of First Citizens Bank’s acquisition of Silicon Valley Bank. The deal, which was announced on Monday, has been widely seen as a major development in the banking and technology industries, and has sparked a surge in investor interest in both sectors.
The FTSE 100 index opened up 0.6%, with gains across a broad range of sectors. European markets also saw gains, with the German DAX and the French CAC 40 both up around 0.5% in early trading.
The strong market response to the acquisition reflects investor confidence in both First Citizens and Silicon Valley Bank, as well as broader optimism about the prospects for the banking and technology sectors. The deal is likely to bring new resources and expertise to both industries, which are already undergoing rapid transformation and growth.
In addition to the immediate market gains, the acquisition is also likely to have longer-term implications for the banking and technology sectors. Silicon Valley Bank has long been a leading player in the technology industry, and its acquisition by First Citizens is likely to bring new opportunities for innovation and growth in the sector. At the same time, the deal will also strengthen First Citizens’ position in the technology, healthcare, and life sciences industries, where the bank has been focusing its efforts in recent years.
Overall, the market response to the Silicon Valley Bank deal reflects a broader sense of optimism about the future of the banking and technology sectors. As these industries continue to evolve and adapt to changing market conditions, companies that are well positioned to invest in growth and capitalize on new opportunities are likely to be successful in the coming years.
US and Asia
Across the pond, S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green as trade began in Europe.
Wall Street reversed earlier losses to close in positive territory on Friday as markets capped off a bumpy week following the Federal Reserve’s interest rate decision on Wednesday and further pressure in the banking sector.
The Dow Jones (^DJI) rose 0.41% to close at 32,237 points. The S&P 500 (^GSPC) climbed 0.56% to finish at 3,970 points and the tech-heavy NASDAQ (^IXIC) gained 0.31% to 11,823.
On Friday, St Louis Fed president James Bullard raised his 2023 interest rate projection to 5.625%. This would outpace the Fed’s latest “dot plot” projections, which suggest rates will continue to tick higher in 2023, but only slightly, with benchmark interest rates seen peaking at 5.1% this year, on par with the Fed’s previous December projection.
In Asia this Monday, Tokyo’s Nikkei 225 (^N225) rose 0.33% to 27,476 points, while the Hang Seng (^HSI) in Hong Kong slipped 0.99% to 19,718. The Shanghai Composite (000001.SS) also lost ground, falling 0.44% to 3,251 points.
FTSE 100
Back in London, bank shares were among the leading risers, with Barclays (BARC.L) rallying 1.94%, Standard Chartered (STAN.L) gaining 0.81% and NatWest (NWG.L) and Lloyds (LLOY.L) both up 1.8%.
“Investors better understand the problems facing American banks today are not remotely similar to the subprime mortgage crisis when underwater borrowers defaulted on loans en masse,” Stephen Innes, managing partner at SPI Asset Management, said.
“Instead, banks are warehousing long-duration high-quality paper but fund the book at higher short-term rates; hence they are bleeding profits on mismatched interest rate positions,” he added.
Standard Chartered jumped after agreeing to sell its Jordanian business. The lender said it would sell the business to Arab Jordan Investment Bank (AJIB) as part of its plan to narrow its focus to faster-growing markets in the region.
Shares in AstraZeneca (AZN.L) rose 1.3% after it announced positive high-level results from its Neuro-TTRansform phase III trial for eplontersen.
