US STOCKS-Futures climb as banking crisis fears ebb after SVB deal

First Citizens Bancshares (Tennessee)

27/03/2023 12:33

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      First Citizens to buy SVB assets; shares jump
    

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      Regional, large bank stocks jump
    

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      Futures up: Dow 0.59%, S&P 0.59%, Nasdaq 0.33%
    

  
 (Updates prices throughout; adds details, comments)
    By Amruta Khandekar and Ankika Biswas
       March 27 (Reuters) - U.S. stock index futures gained on
Monday after a buyout deal for the deposits and loans of the
failed Silicon Valley Bank helped soothe some jitters around
stress in the banking sector.
    First Citizens BancShares Inc  FCNCA.O  said on Monday it
will acquire parts of Silicon Valley Bank  SIVB.O , which
collapsed earlier this month in the largest bank failure since
the 2008 financial crisis, unleashing fears about a liquidity
crunch in the sector.
    Shares of First Citizens jumped 25% in premarket trade,
while First Republic Bank  FRC.N  surged 31.5% after a report
said U.S. authorities were considering more support for banks,
which could give the embattled regional lender more time to
shore up its balance sheet.
    Regional banks Western Alliance Bancorp  WAL.N  and PacWest
Bancorp  PACW.O  also climbed 6.8% and 11.8%, respectively.
    Shares of major U.S. banks JPMorgan Chase & Co  JPM.N ,
Citigroup  C.N  and Bank of America  BAC.N  advanced between 2%
and 2.5%.   
    European bank shares also rebounded from declines last week
when a sharp jump in Deutsche Bank's  DB.N  credit default
swaps, a type of insurance for bondholders, had exacerbated
worries about the health of banks in the region.
    "SVB was a victim of growing too fast and unwisely investing
too much of its deposit base in longer dated treasuries. The
take over has provided some reassurance that beneath this huge
mistake SVB was basically sound," said Stuart Cole, head macro
economist at Equiti Capital.
    The absence of any new banking failures over the weekend has
also helped sentiment, Cole added.
    U.S. Treasury yields edged higher on Monday as fears about
the banking sector eased.
    Traders have largely priced in a pause in the Federal
Reserve's rate hikes in May amid lingering worries about the
banking sector stress potentially causing a steep economic
downturn. 
    Despite the turbulence in financial markets, the benchmark
S&P 500  .SPX  and the tech-heavy Nasdaq  .IXIC  on Friday
logged their biggest two-week gains since early February and are
on course for a quarterly gain.
    Investors are also awaiting a host of economic data this
week, including a consumer confidence reading and an inflation
report that could give more clues about the Fed's monetary
policy path.      
    Remarks by Fed Board Governor Philip Jefferson, a voting
member of the Federal Open Market Committee (FOMC) this year, on
monetary policy later in the day will also be on the radar.
     At 6:48 a.m. ET, Dow e-minis  1YMcv1  were up 191 points,
or 0.59%, S&P 500 e-minis  EScv1  were up 23.75 points, or
0.59%, and Nasdaq 100 e-minis  NQcv1  were up 42.25 points, or
0.33%.
    Among other stocks, U.S.-listed shares of AstraZeneca Plc
 AZN.O  gained nearly 2% premarket after the drugmaker's
Eplontersen drug showed positive results in a late-stage trial.

 (Reporting by Amruta Khandekar and Ankika Biswas; Editing by
Dhanya Ann Thoppil and Vinay Dwivedi)
 ((Amruta.Khandekar@thomsonreuters.com;))