Bank Shares Extend Gains On European Summit Optimism

July 2nd, 2012 by Trefis Team
-19.05%
Downside
15.91
Market
12.88
Trefis
DB: Deutsche Bank logo
DB
Deutsche Bank

The share prices of major banks received a boost over trading on Friday after encouraging developments at the European Summit helped ease investor concerns over a deteriorating debt situation in Europe. Leaders from Eurozone nations reached agreements over a range of issues concerning the crisis, and the single biggest achievement was the clearance of the soon-to-be-formed European Stability Mechanism (ESM) to pump funds directly into the banking systems of troubled member nations. Shares of Deutsche Bank (NYSE:DB) rose by almost 7% over trading, followed by a gain of more than 5% for the shares of Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS) and Credit Suisse (NYSE:CS).

See our full analysis for Deutsche Bank | Morgan Stanley | Bank of America | Credit Suisse

The fragile condition of Spain’s banking system has been weighing heavily on investor sentiments over recent weeks. A lot of hopes were pinned to the recently concluded European Summit in Brussels which aimed at coming up with broad steps to get the region’s economy back on its feet.

Relevant Articles
  1. Up 18% in 2023, Where Is Deutsche Bank Stock Headed?
  2. What To Expect From Deutsche Bank Stock?
  3. What To Expect From Deutsche Bank Stock?
  4. Is Deutsche Bank Stock Fairly Priced?
  5. What To Expect From Deutsche Bank Stock?
  6. Where Is Deutsche Bank Stock Headed?

Earlier in June, Spain formally requested aid for its banking systems. One of the key decisions made at the European Summit was to clear the European Union’s permanent bailout fund – the ESM – to capitalize Spain’s banks directly. Moreover, the concerns of current holders of Spanish government notes about the ESM’s preferred creditor status were comprehensively addressed when EU leaders decided to waive this condition for Spain.

Another outcome of the summit which was cheered by investors was the agreement to establish a central supervision authority for all the banks in the Eurozone to work in tandem with the European Central Bank (ECB).

Markets around the world reacted positively to these developments, with the banks’ shares which had been battered the most over recent weeks showing the most recovery.

Submit a Post at Trefis Powered by Data and Interactive Charts | Understand What Drives a Stock at Trefis