European shares rose on Wednesday as investor doubts about the health of the banking sector continued to ease.
Pan-European Stoxx 600 The index rose 0.9% in afternoon trade, while banks gained 1.3%. Tech stocks reversed Tuesday’s declines with a 1.9% gain, while the Financial Services sector rose 0.8%.
Only retail and autos were in the red, advancing on both sides of the flatline throughout the morning.
UBS shares rose 2% after the bank announced that Sergio Ermotti will return as group CEO from April 5, following its recent acquisition of Credit Suisse. Gains retreated to a 1.6% gain in the afternoon.
Pete Whitman, a partner at Porta Advisors, said the level of public anger over the “failure of successive administrations” at Credit Suisse, which has overseen numerous scandals, should not be underestimated.
“Confidence needs to be rebuilt. Confidence in the banking sector at large and confidence with policymakers, and Sergio Ermotti is certainly someone who can provide stability and inspire confidence,” Whitman told CNBC’s “Squawk Box Europe.”
Ermotti was Group CEO at UBS from November 2011 to October 2020.
Regional markets closed mixed on Tuesday as investors appeared to be in a holding mode after sharp market volatility.
Banks managed to finish higher after a chaotic session despite fresh bad news as French authorities searched the offices of several major banks on suspicion of money laundering and financial fraud.
“Every passing day reinforces the market, and a line is drawn under systemic banking concerns (individual woes are another matter),” analysts at ING Bank said in a morning note.
“While markets have spent the last three weeks looking for hairline fractures in every bank’s balance sheet and business model, there is a case to be made that plenty of shelves have already been checked for skeletons.”
Now the macroeconomic picture for the markets, they said, is more likely to lead to a credit crunch.