3D illustration of the Global stock market - Downturn / negative growth recession

Bank stocks bounce off record low

European stocks bounced back sharply as investors snapped up beaten-down shares.....

On Monday, European stocks bounced back sharply as investors snapped up beaten-down shares in the banking sector that hit a record low last week and data gave signs of pick-up in the Chinese economy. 

The pan-European STOXX 600 index jumped 2.2%, recording its biggest percentage gain since mid-June, after last week’s 3.6% drop. 

The broader banks index surged 5.6% in its first session of gain in eight days. 

HSBC Holdings surged 8.9% after Chinese insurance group Ping An, the biggest shareholder in the British bank, boosted its stake to 8.00% from 7.95%. 

Commerzbank rose 5.6% after it named a top manager at rival Deutsche Bank, Manfred Knof, to lead the bank. The stock move was, however, in line with the broader sector. 

Investors have shunned Europe’s banking sector hit by a cocktail of lower global borrowing costs, rising bad loans due to the economic downturn and a dirty money scandal that made it the worst performer this year with a 42% decline. 

“There’s a chance for tactical rebalancing, but not a structural rally in banks,” said Dhaval Joshi, European investment strategist at BCA Research. 

Investors have been wary about a second wave of coronavirus infections hampering business activity in Europe, while uncertainty about more U.S. fiscal stimulus and a Brexit trade deal have all sparked bouts of volatility in financial markets this month. 

“With each of these issues remaining ‘live’ in the near term, we expect markets to remain choppy for a bit longer,” Morgan Stanley’s equity strategist Graham Secker wrote in a note. 

However, the worst weekly selloff in three months drove bargain hunters to step in, while data showed profits at China’s industrial firms grew for the fourth straight month in August helped the trade-sensitive German index outperform. 

Europe’s auto and industrial sectors, heavily reliant on Chinese demand, rose more than 3.5%. 

ArcelorMittal SA gained 4.8% after Cleveland-Cliffs Inc agreed to buy the U.S. assets of the steelmaker for about $1.4 billion. 

Sonova Holding AG, the world’s biggest hearing aid maker, surged 14.4% as it expects revenue to return to growth in the next six months. 

London-based spirits maker Diageo rose 6.1% after saying it had made a strong start to its fiscal year 2021, with its U.S. business performing ahead of expectations.  

Reported by Sruthi Shankar 

Sourced Reuters 

For more Finance & Investment news follow i-invest Online


Other stories you may like

  • Uk third in the world by ransomware attacks – who are the targets?
    A unique look into ransomware attacks that affected companies with 3.6T GBP of combined revenue The UK is 3rd in the world by ransomware attacks, new research by cybersecurity company NordLocker reveals. The new study analysed numerous databases of ransomware incidents that affected over 5,000…
  • The future of grief – using technology to preserve memories
    W1 Immersive Voice Gems: 100 Year Archive – Voice Gems is creating a new way to preserve the human voice, containing messages of love, death, hope and legacy On the 8th September, pioneering artists and technologists Harry Yeff (Reeps100) and Trung Bao opened a solo…
  • Kroo Brings Apple Pay to Customers
    A safer, more secure and private way to pay with iPhone and Apple Watch Kroo, having received its full banking licence, today brings it customers Apple Pay, a safer, more secure and private way to pay that helps customers avoid handing their payment card to…
  • Yapily forms strategic partnership with Pleo enabling simplified payments experience for its UK users
    Pleo teams up with open banking provider Yapily to boost cash flow for businesses Fintech unicorn Pleo, which offers a smart business spending solution, has formed a strategic partnership with open banking platform Yapily to enable a simplified payments experience for its UK users. Research…
  • Nidec signs joint venture agreement with FREYR Battery
    Nidec signs join venture agreement with Norwegian Semi-Solid Lithium-Ion Battery Manufacturer FREYR Battery The joint venture agreement includes development, manufacturing and sale of integrated, low carbon ESS solutions to industrial and utility grade customers, contributing to the promotion of renewable energy and the realisation of…

Follow us