Europe open: Shares slip on bank fears; Kindred soars on potential sale

European stocks were weaker at the open on Wednesday as fears resurfaced over the stability of the banking system after poor results by US bank First Republic saw its shares slump overnight.

The pan-European Stoxx 600 index was down 0.48% at 0815 BST with all major markets lower after a sharp fall in the US overnight and a mixed session in Asia.

Shares in First Republic almost halved overnight after the regional bank posted its latest quarterly, saying that deposits dropped 40% to $104.5bn in the first quarter.

‘’Realisation is dawning that more ominous clouds are gathering over the US economy, causing fresh nervousness for investors. Despite some better-than-expected results from the first of the big tech crowd to report, the darkening picture of consumer confidence has increased concerns about lower spending ahead,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“The worry mill is continuing to grind about the banking crisis, with First Republic Bank looking fragile after its shares collapsed to a record low. The regulatory cavalry is likely to be on standby to step in unless more funding can be raised from the large white knight lenders.

Oil prices were also under pressure, with Brent crude hovering around $81 a barrel as investors fret about weaker global demand.

In equity news, shares in Asia-focused bank Standard Chartered fell on general industry sentiment, despite posting a 21% rise in pre-tax profit, ahead of estimates.

Stockholm-listed betting and gaming operator Kindred Group shares surged by more than 10% after the company said it had launched a strategic review to consider a potential merger or sale of the company.

Kindred’s board of directors will consider all potential alternatives that can deliver value for the company’s shareholders, including a merger, sale or other possible strategic transactions.

Reporting by Frank Prenesti for Sharecast.com