European equities rise and Asian stocks buoyed by Alibaba’s break-up plan

European equities rose on Wednesday while stocks in Asia were buoyed by Chinese ecommerce giant Alibaba’s plans to splinter into six business units following years of pressure from domestic regulators.

Europe’s region-wide Stoxx 600 index added 0.6 per cent in early trading, with shares in UBS up 2 per cent after the bank said it would bring back Sergio Ermotti as chief executive to steer its takeover of Credit Suisse. Europe’s Stoxx 600 Banks index gained 1 per cent.

London’s FTSE 100, meanwhile, rose 0.4 per cent ahead of the latest shop price index from the British Retail Consortium and February mortgage approvals data from the Office for National Statistics.

In Asia, Alibaba’s Hong Kong-listed shares rose more than 12 per cent, following similar gains on Wall Street the day before, while the Hang Seng Tech index tracking the largest technology companies listed in the city climbed 1.8 per cent. China’s CSI 300 rose 0.2 per cent.

The moves in Asia came after Alibaba announced a radical restructuring plan on Tuesday that would see the company separated into business groups dedicated to cloud computing, ecommerce, local services, logistics, digital commerce and media. Long under pressure from domestic regulators, Alibaba’s stock has fallen almost 70 per cent from its October 2020 peak.

In the US, futures contracts tracking Wall Street’s S&P 500 and the tech-heavy Nasdaq 100 added 0.7 per cent and 0.8 per cent respectively ahead of the New York open.

The S&P 500 dipped 0.2 per cent in the previous session for its first decline in three days, dragged lower by tech giants including Alphabet and Apple. Bank stocks were steady, suggesting investors’ jitters following turmoil at Silicon Valley Bank, Signature and First Republic this month may be beginning to ease.

Traders cheered the lack of volatility. “It’s not apparent why the market is less whippy this week,” said Mike Zigmont, head of trading and research at Harvest Volatility. “The calming of the investor community is certainly welcome but also feels transient.”

Bond markets were also calm, with the two-year US Treasury yield flat at 4.06 per cent and the yield on the 10-year Treasury marginally lower at 3.56 per cent. Yields fall when prices rise. The dollar advanced 0.2 per cent against a basket of six other currencies.

On an otherwise quiet day for economic data releases, investors are expected to focus on figures for pending US house sales, which are forecast to have declined 2.3 per cent in February from January, according to economists polled by Refinitiv.

Oil prices continued to rise. Brent crude rose 0.7 per cent to $79.17 a barrel, up from roughly $73 a barrel two weeks ago.

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