Red returns after respite for UK stock markets

Positive US data showing that inflation slowed down in February cheered investors and put an end to the global rout in banking stocks that started on Friday after the collapse of SVB Financial. Figures were in line with expectations, which fuelled expectations of a smaller rate hike at the Fed meeting next week. The FTSE 100 ended the session 1.2% higher. The yield on 10Y Gilts advanced by 15bps while bank stocks bounced back.

However, the FTSE 100 was down 0.9% this morning, as uncertainty persists over rate hikes and the financial sector. Prudential shares tumbled 6% after the insurance company posted a decline in profit for 2022 amid lower gross premiums earned.

U.K. Chancellor of the Exchequer Jeremy Hunt's is due to unveil its spring budget at 12.30 pm. It is expected to include measures to boost investment such as tax incentives for businesses. The Treasury already announced that the Energy Price Guarantee will remain at £2500 for an extra three months.

 

Things to read today:

Banks are designed to fail — and they do (Financial Times)

Silicon Valley Bank Creditors Form Group in Advance of Possible Bankruptcy (WSJ)

France’s Record February Inflation Revised Higher as Food Soars (Bloomberg)