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April 10, 2013 11:32 pm
European banking stocks were in high demand as investors sought out riskier assets amid a continent-wide rally.
The regional FTSE Eurofirst 300 index rose 1.8 per cent to 1,186.17. The index was driven higher by the banking sub-index, which gained 3.4 per cent to 465.78.
Italian carmaker Fiat was the best-performing stock, however, even after Sergio Marchionne, its chief executive, on Tuesday gave a gloomy assessment of the European car market.
Mr Marchionne also said the company may need to raise additional capital after it completes a planned buyout of Chrysler.
Nevertheless the shares climbed 7.4 per cent to €4.34 against a 3.2 per cent gain on Milan’s benchmark FTSE MIB index to 15,928.64.
Within the banking sector, Belgium lender KBC topped the leaderboard as its shares rallied 6.8 per cent to €28.92.
In Spain, Banco de Sabadell rose 6.7 per cent to €1.50 while Spain’s two largest banks by market capitalisation followed closely behind. Banco Santander rose 5.1 per cent to €5.52 while BBVA climbed 4.3 per cent to €6.97.
Madrid’s Ibex 35 rallied 3.4 per cent to 8,136.4.
In France, Crédit Agricole closed up 6.2 per cent at €6.60 while Société Générale finished 6.1 per cent higher at €26.81.
The Paris CAC 40 index gained 2 per cent to 3,743.71.
Italy’s largest lender UniCredit jumped 5.7 per cent to €3.54.
Meanwhile, shares in French tyremaker Michelin lost ground. Analysts at Credit Suisse cut their rating on the stock from “outperform” to “neutral”.
“We see evidence for a prolonged weakness in tyre markets, volume and pricing,” they wrote in a note to clients.
They added: “We believe it is time to reassess the risk of owning European tyre stocks.”
The analysts also downgraded their rating on Continental in Germany, from “outperform” to “neutral”.
However, its shares rallied 3 per cent to €90.81. Frankfurt’s Xetra Dax gained 2.3 per cent 7,810.63.
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