Surge in European banking stocks trigger rebound in share markets

European bourses rebounded strongly on Wednesday, led by a surge in the region's banking stocks with shares in Germany's biggest lender, Deutsche Bank, rocketing by 13 per cent.

The eurozone's blue-chip Euro Stoxx 50 jumped 2.8 per cent to 2,812 points in morning trading, as investors laid aside recent worries about the threat of another global financial crisis and piled back into leading financial houses' shares.

Still, analysts warned that share markets were likely to face renewed volatility in the coming weeks, with investors concerned about a raft of global economic uncertainties, including the slowdown in emerging markets such as China.

Helping to drive Wednesday's rebound was a strong showing by Deutsche Bank stock.

Shares in the Frankfurt-based bank climbed by 13 per cent to 14.96 euros (16.9 dollars) in morning trading after the Financial Times reported that the lender was considering buying back several billion euros of its debt to help shore up the tumbling value of its securities.

Germany's Commerzbank also rose, climbing 8.2 per cent to 6.84 euros as Frankfurt's trading day unfolded.

The gain in German bank shares helped to push Frankfurt's main DAX index back above the key 9,000-point index mark after the index gained 2.4 per cent in morning trading. The index closed down 1.1 per cent on Tuesday.

The solid gains in German banking stocks were reflected among other European bank shares with France's Societe Generale 8 per cent higher, while BNP Paribas gained 5 per cent.

The story was repeated across other parts of the 19-member eurozone with Italy's Unicredit up about 10 per cent and Intesa SanPaolo climbing almost 8 per cent.

The gains in banking stocks led to the Paris bourse's CAC-40 index rising 2.3 per cent and Milan's MIB index surging by 4.9 per cent.

Last update: Wed, 10/02/2016 - 22:42
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