icon
icon
icon
icon
Upgrade
icon

European Stocks Soar as Markets Rebound Amid Banking Sector Surge and BOJ Signals

AInvestWednesday, Aug 7, 2024 1:00 pm ET
1min read
European stocks saw their largest single-day gain since November, as global markets rebounded following Monday's sell-off.

By the close in Paris, the Stoxx Europe 600 Index increased 1.5% to 495.96 points, marking a second consecutive day of gains. Banking stocks led the surge, while healthcare stocks lagged behind; pharmaceutical giant Novo Nordisk reported disappointing sales for its popular weight-loss drug Wegovy.

Last week's downturn continued into Monday after an unexpected rate hike from the Bank of Japan prompted traders to unwind arbitrage trades, sparking a global sell-off. Markets began to recover on Tuesday, buoyed further on Wednesday after the Bank of Japan's Deputy Governor indicated that the central bank would hold off on additional rate hikes if market volatility persisted.

"Market volumes have fallen back to trend levels and volatility is reversing sharply, moving towards normalcy. A significant amount of the technical sell-off has occurred, and equities are shifting towards stronger buying," said Carl Dooley, Head of Trading for EMEA at TD Cowen. "We expect the indices to move higher."

In the banking sector, Dutch bank ABN AMRO rose 5.6% after reporting stronger-than-expected second-quarter profits and revising its loan income guidance upwards. Conversely, Commerzbank of Germany fell 3.7% as its second-quarter net profit missed analysts' average expectations.

Major European indices closed higher across the board, with Germany's DAX30 up 1.64%, the UK's FTSE 100 up 1.76%, France's CAC40 up 1.91%, and the Euro Stoxx 50 rising 2%.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.