US markets opened higher as a result of the takeover of Silicon Valley Bank, which helped to restore investor confidence following concerns over a possible global financial crisis.
The Dow Jones Industrial Average started the day up 0.8% at 32,500.96, while the broad-based S&P 500 increased by 0.6% to 3,995.19. Shortly after the opening bell, the Nasdaq Composite also rose by 0.6% to 11,850.92.
First Citizens shares rocketed by 49pc at the opening bell on Wall Street after its takeover of Silicon Valley bank’s assets and loans.
The acquisition of Silicon Valley Bank seems to have alleviated concerns regarding the well-being of the US regional banking industry. As a result, shares of mid-sized banks such as KeyCorp, Zions, and First Horizon surged.
Additionally, First Republic Bank, which had received a $30bn bailout package from 11 of the largest banks in the country, witnessed a significant increase of 23% in its shares.
According to Craig Erlam, a senior market analyst at OANDA, the start of the week has been relatively calm, with investors feeling relieved that no fresh banking sector turmoil occurred over the weekend. The fear last week was that Deutsche Bank would be next in the firing line, even if the fundamentals did not necessarily support this concern. Anxiety is expected to persist until a few weeks of calm have passed.
However, the frenzy on Friday appears to be over, and the panic of recent weeks may begin to subside, allowing for a more reasonable market to emerge. Erlam notes that the authorities were active over the weekend, attempting to rectify the issues of the past few weeks.
In this case, a significant portion of SVB was sold to First Citizens Bank, with the FDIC retaining the remaining securities and other assets.
