By Peter Nurse
Investing.com - European stock markets traded higher Tuesday, helped by gains in the region’s banking sector as confidence grows that the recent turbulence is over.
At 03:50 ET (07:50 GMT), the DAX index in Germany traded 0.6% higher, the CAC 40 in France climbed 0.7% and the FTSE 100 in the U.K. rose 0.5%.
European banking shares rose early Tuesday, continuing to recover after last week's sharp declines in the wake of the collapse of a couple of regional U.S. banks, the state-orchestrated rescue of Credit Suisse (SIX:CSGN) by rival UBS (SIX:UBSG) and the worries about Deutsche Bank 's (ETR:DBKGn) credit worthiness.
Officials at the European Central Bank have been at pains to point out that the region is much better prepared than it was for the 2008 collapse.
“We see there’s increased concern in financial markets over the situation in the U.S. and Swiss jurisdictions,” Governing Council member Gediminas Simkus said on Monday. “But if we look at banks in the euro system, it’s a different jurisdiction, where there’s high capital buffers, high liquidity and growing profitability from rising interest rates.”
UBS stock rose over 2%, helped by CEO Ralph Hamers stating that the takeover of Credit Suisse presents a growth opportunity, according to an internal memo seen by Reuters.
Elsewhere, Ocado (LON:OCDO) stock rose 2% after the online supermarket operation, half-owned by Marks & Spencer (LON:MKS), recorded a modest gain in revenue in the first quarter, even though record food inflation forced customers to cut back on purchases.
Diageo (LON:DGE) stock fell 0.5% after the beverage company announced CEO Ivan Menezes is set to retire at the end of June, while 888 Holdings' (LON:888) stock fell 1.8% after Britain's Gambling Commission handed its largest financial penalty to the William Hill betting group, which 888 acquired last year, after it failed to protect consumers and stop money laundering.
In economic news, French business confidence remained healthy in March despite the recent turmoil in the banking sector, according to data released Tuesday, following on from German business morale unexpectedly rising in March.
Oil edged higher Tuesday, continuing its recent rally ahead of the release of the latest U.S. crude stockpiles data, which could provide information about the supply-demand outlook in the world’s largest consumer.
The American Petroleum Institute, an industry group, will publish its inventory data later in the session, and is expected to show another build after expanding last week by just over 3 million barrels.
By 03:50 ET, U.S. crude futures traded 0.2% higher at $72.97 a barrel, while the Brent contract climbed 0.1% to $77.80.
The crude market has bounced from the 15-month lows seen earlier this month as markets feared that slowing economic growth will dent crude demand this year.
Additionally, gold futures rose 0.1% to $1,972.70/oz, while EUR/USD traded 0.3% higher at 1.0824.