UK, Swiss and eurozone lenders expected to make at least €23bn in provisions, the FT has reported. The S&P 500 is set to rise 0.5 percent this morning, while the FTSE 100 could gain 0.3 percent. Europe’s banking sector is still recovering from problems from the financial crisis of 2008.
Shares in European banks have dropped 31 percent this year.
This is compared with a 10 percent drop in the benchmark Stoxx 600 index.
The banks are trading at less than 40 percent of the book value of their net assets.
Jon Peace, an analyst at Credit Suisse, said: “It’s going to be another difficult one — several banks have flagged this could be the worst quarter of the year.”
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5.52am update: Gold hits record high as US-China ties worsen
MSCI’s ex-Japan Asia-Pacific index rose 1.3 percent as Taiwan’s TSMC, Asia’s third-largest company by market capitalisation, rose almost 10 percent.
The chipmaker’s gains boosted other tech stocks in the region and came after rival Intel signalled it may give up manufacturing its own components due to delays in new 7 nanometer chip technology.
Also soothing sentiment, Chinese shares eked out gains after big falls late last week, with CSI300 index rising 0.5 percent.
S&P500 futures were last up 0.4 percent in choppy trade while Japan’s Nikkei fell 0.5 percent, resuming trade after a long weekend and catching up with falls in global shares late last week.