By Natsuko Waki
LONDON, Feb 12 (Reuters) - World stocks recovered on Tuesday
from 2-1/2 week lows after results from Credit Suisse <CSGN.VX>
eased worries about the banking sector, but European credit
markets deteriorated further.
The euro steadied near last week's two-week lows versus the
dollar as investors waited for a key German survey to assess if
euro zone growth has slowed enough to warrant interest rate cuts
soon, while supply problems boosted platinum prices to record
highs.
Credit Suisse reported a 49 percent fall in fourth-quarter
net profit to 1.33 billion Swiss francs but reduced total
writedowns from the U.S. subprime mortgage fallout, in dramatic
contrast to rising charges by rivals.
"(Credit Suisse) figures are quite good and it shows that
not all banks have been infected with subprime," said Heino
Ruland, strategist at FrankfurtFinanz.
Experts estimate the credit crisis will eventually cost the
global banking sector around $300-400 billion in writedowns.
However there is limited evidence that tightening credit
standards have battered wider corporate activity with talk of
merger and acquisition in some sectors supporting stocks.
The FTSEurofirst 300 index <> was up 0.3 percent on
the day while MSCI main world equity index <.MIWD00000PUS> was
up a quarter percent, having hit its weakest since mid-January
on Monday. Credit Suisse rose initially but quickly fell back.
In contrast, European credit market sentiment deteriorated
with key indexes hitting record wide levels due to concerns
about forced selling of structured credit products.
The iTraxx Crossover index <ITCRS5EA=GFI>, the mostly-widely
watched indicator of European credit market sentiment, widened
to 565 basis points.
"There continues to be speculation of structured credit
unwinds, which is weighing on credit and especially investment
grade," said Jim Reid, credit strategist at Deutsche Bank.
"As spreads widen, so triggers for structured products are
breached which forces them to sell assets which in turn runs the
risk of destabilising other structures."
A plan by Standard Chartered <STAN.L> to provide $7 billion
of backing to its structured investment vehicle (SIV)
Whistlejacket lapsed, in another example of how the credit
crunch is causing problems.
In the currency market, the euro was steady at $1.4531
<EUR=>, after dropping last week as European Central Bank
President Jean-Claude Trichet was perceived to have toned down
hawkish ECB rhetoric.
Germany's ZEW, due at 1000 GMT, is expected to show economic
sentiment in the euro zone's economy worsened further in January
-- but that may not be enough to cause fresh lows in the euro
given the steepness of the recent sell-off.
PLATINUM SHINES
Platinum hit a record high for the ninth straight trading
day <XPT=>, rising as high as $1,965 an ounce as supply concerns
lingered due to a power crisis in South Africa.
Gold <XAU=> was steady at $922.70 an ounce, holding within
sight of a record high set earlier in February.
Firmer commodity prices underpinned emerging markets, where
stocks <.MSCIEF> rose half a percent on the day and emerging
sovereign spreads <11EMJ> tightened 1 basis point.
The March Bund future <FGBLH8> fell 11 ticks.
U.S. light crude <CLc1> fell half a percent to $93.21 a
barrel as investors focused on a slowing U.S. economy.
(Additional reporting by Natalie Harrison, editing by Mike
Peacock)
