HSBC buys Silicon Valley Bank in the UK

Swedish real estate firm Fastighets AB Balder led European stocks in the late afternoon, up 4.8% amid a broadly pessimistic Stoxx 600 index.

The Fintech Wise forex trading platform fell 12% after that declaring It had money in a collapsing Silicon Valley bank, though the spokesperson told Reuters it had “little exposure.”

European technology stocks fell 1.85% overall.

Meanwhile, banks remained among the worst performers, with Commerzbank down 11.4% and Credit Suisse down 8.9%.

– Jenny Reed

UBS analysts said in a note that the drop in HSBC’s share price after news that it would buy the UK subsidiary of Silicon Valley for 1 pound ($1.21) was “driven by profit-taking rather than underlying weakness.”

HSBC confirmed the acquisition, which excludes the assets and liabilities of Silicon Valley bank parent SVB UK, early Monday.

“We believe the 9 percent drop in equities since Wednesday is profit-taking and sector rotation rather than a change in outlook: competition for deposits increases the value of the best deposit concessions,” UBS said.

“We see scope for unprecedented value creation through volumes, cost reductions (US and UK) and potential disposals.”

In the broader banking sector, analysts said they expect the SVB crisis to lead to more liquidity regulation of banks, investors favoring larger banks over smaller ones, retail-focused banks over trade-centric ones, and greater competition for lead deposits. to cut net interest margins from 2024-25.

There’s still “very significant” inflation, says April LaRusse, chief investment specialist at Insight Investment.

Patrick Armstrong, chief investment officer of Plurimi Wealth LLP, discusses the latest on the SVB fallout, and where the Fed and investors alike can go from here.

Ross Mould, chief investment officer at AJ Bell, on the Silicon Valley bank break-up.

HSBC will acquire Silicon Valley Bank UK Limited, according to a statement from the Bank of England.

The Bank of England said the measure was taken “to stabilize SVBUK, ensure continuity of banking services, reduce disruption to the UK technology sector and support confidence in the financial system.”

The Silicon Valley bank rattled the banking sector and markets more broadly when it surprised investors on Wednesday with news that it needed to raise $2.25 billion to prop up its balance sheet, and that it had sold all of its bonds at a loss of $1.8 billion.

Then regulators closed the bank after customers had withdrawn $42 billion in deposits by the end of Thursday.

HSBC said it would buy SVBUK for £1.

Hannah Ward Glinton and Matt Rossoff contributed to this report.

Shares of a UK-based technology company that designs custom chips and semiconductors are expected to rise more than 50% in the next 12 months, according to Barclays Equity Research.

The investment bank said the fast-growing data center space will drive sales and profit growth faster than any other company in our coverage.

CNBC Pro subscribers can read more about semiconductor stocks here.

– Ganesh Rao

The Silicon Valley bank collapsed on Friday, and investor Leon Cooperman believes that situation is a byproduct of the Fed’s low interest rates.

“This is the result of stupid monetary policy of zero-to-negative rates for a decade,” Cooperman, president of Omega Advisors, told CNBC’s Scott Wapner.

The Fed cut interest rates to zero to stabilize the economy after the 2008 financial crisis. Rates remained low for years after that until the Fed started to rise in the late 2010s. However, in 2020, the central bank lowered interest rates again to Zero with the spread of Covid-19 all over the world.

Over the past year, the central bank has raised interest rates to stem inflationary pressures.

– Fred Imbert

Citi said the world is going through “rapid and transformative change” when it comes to energy, and called four Buy-rated stocks the “top picks” in the space.

CNBC Pro subscribers can read more here.

– Wizen tan

Regulators scrambled to avert a banking crisis over the weekend, with one of the main goals being to “bolster public confidence” in the US banking system.

A joint statement from Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, and FDIC Chairman Martin Gruenberg said depositors at Silicon Valley Bank and New York’s Signature Bank will receive all of their funds as soon as Monday.

“The taxpayer will not bear any losses associated with Silicon Valley’s decision,” they said.

—Christina Scheder Burke

Futures extended gains before 6:30 PM ET after US regulators unveiled a plan to stem the damage from the Silicon Valley bank collapse.

Dow futures were last up 297 points, or 0.9%. S&P 500 futures jumped 1.1% and Nasdaq Composite futures advanced 1.2%.

– Tanaya McHale

European markets Heading for a higher open on Monday as investors monitor the fallout from the Silicon Valley bank crisis.

Britain’s FTSE 100 is expected to open top 10 at 7745, Germany’s DAX 82 index up at 15477, France’s CAC 26 points higher at 7228, and Italy’s FTSE MIB 21 points higher at 27312, according to data from IG.

Earnings are set to come from Direct Line and there are no major data releases.

– Holly Ellytt