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US and European markets rebound
12 Feb 2016 18:06
European shares rebounded today as Deutsche Bank and Commerzbank rallied, helping stock markets stage a partial recovery from stinging losses earlier in the week.
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The pan-European FTSEurofirst 300 index ended 3% higher, rising back up off its lowest level in more than two years.
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Fears about how well European banks can cope with slow growth and low interest rates had pushed European banking shares to multi-year lows this week.
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But Deutsche Bank surged 11.8% after saying it would buy back more than $5bn in senior debt, easing concerns about its bonds.
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Its rival Commerzbank also reported a return to profit in the fourth quarter, and Commerzbank shares jumped 18%.
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The STOXX 600 Europe Banks index rose 5.6%. Germany's DAX advanced 1.84%, although it remains nearly 30% below a record high reached in April 2015.
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In Dublin the ISEQ gained 0.95%. AIB (+13.37%) and Bank of Ireland (+2.3%) both performed well.
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Elsewhere, the CAC in Paris added 2.52%, while the FTSE in London gained 3.08%
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Paras Anand, head of European equities at Fidelity International, said the threat to banks had been exaggerated, as had the general market slump this week.
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"We do not have a structurally weak banking sector at the moment," he said. "The current market moves look overdone and we are, for the first time, drawn to some of the harder hit areas."
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Others remained more cautious. Credit Suisse's investment committee kept a "neutral" position on global equity markets and said it was still too early to buy back into stocks.
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The FTSEurofirst 300 still ended down 4% over the course of the week. It is also down 14% since the start of 2016, amid worries about a slowdown in China, the world's second-biggest economy.
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