Europe open: Shares shrug off SVB worries to make gains

European shares opened in positive territory on Tuesday, despite a continued sell-off in Asia overnight in response to investor worries over the impact of the SVB collapse in the US.

The pan-European Stoxx 600 was up 0.26% at 0845 GMT with most major bourses higher. Britain’s FTSE 100 was down 0.32%. US futures were indicating a positive start on Wall Street after the tech-heavy Nasdaq rose 0.45% overnight.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said concerns of mild recessions had been replaced by “a wall of worry about runs on smaller banks like First Republic, and the risk that larger institutions may turn more risk averse to lending”.

"US Treasuries have shot up, and yields have fallen back, although they have crept up ever so slightly as some speculation grows that Jerome Powell won’t want to completely back-track from his intention to keep cooling down inflation."

"The CPI figures out later will be watched super-closely as another hot reading will reinforce expectations that a rate rise, albeit smaller, will be on the cards next week."

Gold prices held above $1900 an ounce, after jumping 2% on Monday as investors turned to the precious metal, which is a traditional safe haven in times of volatility. Oil prices fell below $80 over worries that the fallout from the SVB crisis could slow global growth as central banks paused rate hikes to focus on financial stability.

In equity news, shares in merchant bank Close Brothers fell after a "challenging" first half, posting a drop in profits as it was hit by provisions related to the Novitas loan book.

In the six months to the end of January 2023, operating profit before tax slumped 91% to £11.7m, coming in well below consensus expectations of £33.3m. Adjusted operating profit slid 90% to £12.6m.

Swiss lab instrument maker Tecan jumped as it posted double-digit sales growth in 2022.

Reporting by Frank Prenesti for Sharecast.com