After opening in the red, the flagship CAC 40 index briefly returned to positive territory before turning around in a climate of stock market nervousness: around 10:25, the Parisian rating gave up 0.47% to 6,893 points. Last week, the CAC 40 fell more than 4%, its worst performance in six months.
"The strong and rapid responses of the authorities reassure us, even if it is still too early to be sure that a systemic crisis is avoided," said Xavier Chapard, analyst at LBPAM.
"Markets remain tight this morning, which suggests that confidence, the sinews of war when it comes to banks, remains very fragile," he said.
UBS agreed on Sunday to buy troubled Credit Suisse, a 3 billion Swiss franc (3.03 billion euros) deal hastily concluded after intense negotiations with the federal government to save the country's second-largest bank and restore investor confidence.
As part of this operation, which forms a behemoth of more than $5 trillion in invested assets, the Swiss National Bank is providing liquidity assistance of up to CHF 000 billion to the two institutions and the Swiss government is providing a guarantee of CHF 100 billion for potential losses related to the assets taken over by UBS.
In the wake of this announcement, the central banks of the United States, Europe, Switzerland, England, Canada and Japan announced on Sunday coordinated action to improve access to liquidity, a kind of insurance to restore confidence in the financial system.
French Economy Minister Bruno Le Maire on Monday welcomed a "good agreement" on RMC/BFM TV and hammered that "French banks are solid".
The "two sets of problems", Credit Suisse and failures of US regulation, "do not concern French and European banks", assured Monday the governor of the Bank of France.
A few days after a first stock market shock caused by the bankruptcy of the American bank SVB, Credit Suisse's difficulties, reinforced by the refusal of its largest shareholder Saudi National Bank (SNB) to increase its stake in the capital, rocked the markets last week.
Swiss authorities on Sunday announced an agreement for UBS to buy its historical rival Credit Suisse for 3 billion Swiss francs.
In the bond market, short-term yields continued to fall sharply, signaling that investors consider at this stage and in this tense context that the US Federal Reserve will not raise rates on Wednesday at its next meeting.
Banks under stress again
Societe Generale shares fell by 4.83% to 20.18 euros, those of BNP Paribas by 3.57% to 49.84 euros and those of Credit Agricole by 2.40% to 9.75 euros.
Luxury and defensive support the rating
The luxury sector was in the green like Hermes (+1.27%), LVMH (+1.04%). L'Oréal took 1.28%. Defensive stocks such as Air Liquide (+1.39%) and Remy Cointreau (+1.03%) fulfilled their mission.
© 2023 AFP