Bank shares snap back from recent slide
Shares of European financial institutions see a major boost in their prices with most of them recording gains of at least 5%.
Consequently, shares of European banks saw a major boost in their prices Friday with most of them recording gains in excess of 5% over trading throughout the day. A better-than-expected U.S. job report also set the mood right, easing much of the pressure on U.S. banks' shares.
Shares of Deutsche Bank (DB) jumped a little more than 10% Friday, followed by a 7% hike in price for the shares of RBS (RBS). Barclays (BCS) and Credit Suisse (CS) also saw their shares gain more than 6% value. Among American banks, Morgan Stanley (MS) gained the most with its share prices rising by 5.8%. Shares of BNY Mellon (BK) also gained a healthy 5.2%. The banks have continued their recovery this week, as well.
Even as the Spanish debt situation spirals out of control with several regional governments in the country declaring bankruptcy, investors took hope last fortnight from statements by ECB chairman Mario Draghi as well as German Chancellor Angela Merkel and French President Francois Hollande of immediate action from the Eurozone's regulatory bank. But sentiments waned with each passing day over last week when no such steps were implemented. Consequently, investors ended up selling off bank shares in large numbers.
Investors, however, noted the significant decline in the value of almost all banks -- more particularly for the European banks -- and ended up buying them back on Friday. No doubt, the U.S. job report that was published that day also helped investors. The country's job situation turned out to be better than expected as almost 163,000 new jobs were added in the month of July -- topping economists' expectations of a 95,000 increase in job vacancies for the period.
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