DAX, FTSE Rise on Increased Investor Confidence

The major European stock indices are trading higher late Wednesday on increased investor confidence and dissipating fears over the health of the banking sector.

At 13:00 GMT, Germany’s DAX is trading 15284.20, up 142.18 or +0.94%. The UK’s FTSE 100 Index is at 7552.48, up 68.23 or +0.91% and France’s CAC-40 is trading 7181.06, up 92.72 or +1.31%.

In sector news, bank stocks were up along with the financial services sector. Tech stocks reversed yesterday’s weakness to move higher.

Retail and autos were the only sectors in the red, having bounced either side of the flatline throughout the session.

UBS Shares Rise as Sergio Ermotti Returns as CEO Following Credit Suisse Acquisition

UBS shares rose 3.1% after the bank announced that Sergio Ermotti would return to his role as group CEO from April 5, following the recent acquisition of Credit Suisse. However, gains retreated to a 1.6% uptick by early afternoon.

Beat Wittmann, partner at Porta Advisors, emphasized the need to rebuild trust in the banking sector and policymakers, especially after the scandals at Credit Suisse.

French authorities searched the offices of several large banks on suspicion of money laundering and fiscal fraud.

The market is now more concerned about the macroeconomic picture, with a greater likelihood of a credit crunch.

DAX Stocks

According to a GfK institute survey, German consumer sentiment is expected to slightly improve in April due to a reduction in energy prices, although a full recovery is not expected soon.

Infineon, a chipmaker, raised its outlook for both the fiscal second quarter and 2023, causing its shares to rise by 4.8%.

Despite a pessimistic forecast from Micron Technology, the wider tech index rose by 1.7%, with other semiconductor stocks also increasing.

Aroundtown, a German real estate company, saw its shares fall by 4.8% after reporting a full-year net loss of 457 million euros and suspending dividend payouts due to market uncertainties.

Lastly, the retail index declined by 0.9% following a cautious outlook from British fashion retailer Next.

FTSE Stocks

The FTSE 100 Index edged higher on Wednesday, supported by gains in banks on easing fears of a financial sector meltdown, but Next hit a nearly three-month low after the retail bellwether maintained its cautious outlook for the year.

Next Plc (NXT.L) slumped 6.2% after the fashion retailer said that higher costs for wages and energy were still expected to reduce its profit this year, even as it reported higher annual profit.

Firms that earn through exports were also among gainers. Energy stocks and precious metals miners added 0.9% and 1.7%, respectively, as the pound slipped 0.3%.

Other export-focused companies including Diageo PLC Reckitt Benckiser Group PLC and Tesco PLC were also up between 0.4% to 1.4%.