Stocks mostly rise as crisis fears ease further

Banking shares rebounded as fears of a crisis in the sector eased. ©AFP

London (AFP) - Asian and European stock markets mostly rose Tuesday, as fears of a banking crisis eased further.

World oil prices also advanced as demand jitters receded, while the dollar sagged versus the euro and yen.

"Stocks are trying to find a new equilibrium as bank stresses ease," noted SPI Asset Management analyst Stephen Innes.

Most equity markets had advanced Monday as banks shares jumped after US lender First Citizens bought most of collapsed rival Silicon Valley Bank (SVB).

The gains followed last week's rout over concerns that the turmoil in the sector -- which sparked the UBS takeover of Credit Suisse -- could hit other major institutions, such as German giant Deutsche Bank.

'All about confidence'

Investors hope "the banking crisis which has bedevilled the markets for much of March might be starting to ease", said Russ Mould, investment director at stockbroker AJ Bell.

"It's all about confidence right now -- and anything which reassures shareholders, creditors and depositors that their money is safe with the banks is one step further away from the carnage which claimed SVB and Credit Suisse."

And while markets have responded positively to the measures implemented by authorities to shore up the commercial banking sector, there are still concerns about the impact of ongoing rate hikes by central banks, especially the US Federal Reserve.

Despite the recent turmoil, many central banks have pushed on with monetary tightening as they focus on fighting inflation.

Bank of England governor Andrew Bailey, whose institution ramped up interest rates last week, sounded a note of caution over banking-sector upheaval.

"We are very vigilant.We are in a period of tension, tightness and alertness," he told a parliamentary committee on Tuesday.

He added: "My very strong view about the UK banking system is that it is in a strong position, both capital and liquidity wise.It is not showing signs of problems in that respect and we have tested very extensively."