US stocks rose on Wednesday as waning fears of further turmoil in the banking sector whipped up investor appetite for finance and tech stocks.
Wall Street’s S&P 500 index added 1.4 per cent in a broad-based rally led by the real estate, tech and consumer discretionary sectors. The Nasdaq Composite advanced 1.8 per cent. Both indices are on track for modest monthly gains in March despite the recent collapses of three US banks. The KBW Bank index rose 2.1 per cent, while shares in First Republic Bank — a lender caught up in this month’s financial sector turbulence — climbed 5.6 per cent.
“We’re seeing a marked decline in ‘fear trades’ across the spectrum,” said Karl Schamotta, chief market strategist at Corpay.
“Investors think policymakers on both sides of the Atlantic have ringfenced banking systems against further turbulence.”
Bond markets fluctuated. The yield on the two-year US Treasury note was up 0.05 percentage points at 4.10 per cent, while the yield on the 10-year Treasury was flat at 3.57 per cent. Yields fall when prices rise. The dollar advanced 0.3 per cent against a basket of six other currencies.
Figures out on Wednesday showed US home sales rose for the third consecutive month in February, up 0.8 per cent compared with January. Economists polled by Refinitiv had expected a monthly decline of 2.3 per cent.
In Asia, Alibaba’s Hong Kong-listed shares rose more than 12 per cent, following similar gains on Wall Street the day before, while the Hang Seng Tech index, which tracks the largest technology companies listed in the city, climbed 2.4 per cent to its highest level since late February. China’s CSI 300 rose 0.2 per cent.
The moves came after Alibaba announced a radical restructuring plan on Tuesday that would split the company into six business groups. Long under pressure from domestic regulators, the company’s shares have fallen almost 70 per cent from their October 2020 peak.
Europe’s region-wide Stoxx 600 index added 1.2 per cent, with shares in UBS up 3.7 per cent after the bank said it would bring back Sergio Ermotti as chief executive to steer its takeover of Credit Suisse. Europe’s Stoxx 600 Banks index gained 1.9 per cent.
London’s FTSE 100, meanwhile, rose 1 per cent, helped by real estate stocks after UK mortgage approvals edged up in February, rising to 43,500 from 39,600 in January.
Prices for Brent crude gave up earlier gains to slip 0.5 per cent to $78.28 a barrel. US equivalent West Texas Intermediate fell 0.3 per cent to $72.97 a barrel. Gold, considered a haven asset, fell 0.5 per cent $1,963 an ounce.
