Stocks mixed as bank fears recede

NEW YORK, United States — Global stock markets were mixed Tuesday while the dollar retreated against other currencies as fears of a banking crisis ebbed somewhat after weeks of turmoil.

Following a flattish day on European bourses, US stock indices finished modestly lower, shrugging off a better-than-expected consumer confidence reading. 

The closely watched consumer confidence index increased in March to 104.2 from 103.4 last month, The Conference Board said in a statement.

"While consumers feel a bit more confident about what's ahead, they are slightly less optimistic about the current landscape," said Ataman Ozyildirim, senior director for economics at The Conference Board.

All three major US indices declined, with the S&P 500 losing 0.2 percent.

"Markets are uninspiring today because of the lack of fresh catalysts to encourage the bulls, following the recent financial-sector turbulence," Fawad Razaqzada, analyst at City Index and Forex.com, told AFP.

Meanwhile, the dollar retreated against the euro, pound and yen.

The greenback's pullback reflects lessening worries about a banking crisis that had boosted safe assets, as well as the sense that "a weakening US economy" means "the Fed may be done hiking interest rates," said a note from Convera's Joseph Manimbo.

"Still, the banking crisis appears to be running an elevated temp, so any renewed flare up in the turmoil could spur a flight to safety in the greenback," Manimbo added. 

Most equity markets had advanced Monday as bank shares jumped after US lender First Citizens Bank bought most of rival Silicon Valley Bank (SVB), whose collapse triggered fears of a wider crisis in the financial system.

The gains followed last week's rout over concerns that the turmoil in the sector -- which sparked the UBS takeover of Credit Suisse -- could hit other major institutions, such as German giant Deutsche Bank.

Bank of England governor Andrew Bailey, whose institution ramped up interest rates last week, sounded a note of caution over banking-sector upheaval. 

"We are very vigilant. We are in a period of tension, tightness and alertness," he told a parliamentary committee on Tuesday. 

He added: "My very strong view about the UK banking system is that it is in a strong position, both capital and liquidity wise."

In a separate development on Tuesday, French authorities raided five banks as part of an investigation into suspected cases of massive tax fraud and money laundering.

Back in Washington, US regulators confirmed to the Senate banking committee that they would publish by May 1 a review of recent banking failures and regulatory supervision as officials from the Federal Reserve and Federal Deposit Insurance Corporation faced questions on their actions.