Europe open: Shares lower as bank stability worries persist
European shares opened lower at the start of the week’s final session as worries over the financial stability of banks still weighing on sentiment.
The pan-European Stoxx 600 was down 0.6% at 0800 GMT, with all major bourses lower. Credit Suisse and UBS were in focus after a Bloomberg News report that the two banks are under scrutiny in a probe by the US Department of Justice into whether financial professionals helped Russian oligarchs evade sanctions. UBS shares were lower in early deals.
Investors were also digesting comments from US Treasury Secretary Janet Yellen who said she was prepared to take further action to ensure that bank deposits stay safe amid banking system turmoil, a day after she said there would be no blanket guarantees.
In the UK Bank of England governor Andrew Bailey said interest rates would continue to rise if firms hike prices, a day after the central bank raised tightened monetary policy for the eleventh time since December 2021.
On a light day of corporate news there was little else to drive sentiment. UK retail sales posted an unexpected jump as households cut back on eating out and takeaways in February, choosing food at supermarkets and other goods at discount outlets.
Retail sales unexpectedly rebounded by 1.2% in February from the month before, returning sales volumes to their pre-pandemic level, the Office for National Statistics said.
In France, business activity strengthened in March by more than forecast as the eurozone's second-biggest economy benefited from growth in its dominant services sector.
S&P Global's flash reading for the March purchasing managers' index for services rose to 55.5 points, up from 53.1 in February and also beating forecasts.
In other equity news, travel giant TUI fell sharply after launching a €1.8bn capital raise to repay German state aid it received at the start of the Covid pandemic.
Shares in Smiths Group rose as the British industrial technology company upgraded annual forecasts after first-half profit climbed 27% boosted by strong demand for its products from customers in the oil, gas, airports, ports and defence sectors.
Reporting by Frank Prenesti for Sharecast.com