London: European equities rebounded early on Wednesday to snap a three-day losing streak as miners and oils gained on firmer commodity prices and banks advanced after recent declines.
At 2:35pm, the FTSEurofirst 300 index of top European shares was up 1.6% at 680.42 points. On Tuesday, the benchmark fell 1.9% to the lowest close since the index’s inception in 1997 July.
The broader index rose 1.6%, with energy shares topping the gainers list, followed by banks.
“The market has been both a financial and emotional rollercoaster over the past fortnight. Investors are scrambling to find an area of support to help justify buying back in,” said Chris Hossain, senior sales manager at ODL Securities.
“The banking sector is likely to dictate how markets fare over the coming weeks. Whilst confidence is brittle, market bulls will point to the opinion that much of the dirty linen has been aired.”
Among banks, Standard Chartered Bank was up 7.5%, Barclays rose 2.8% and Commerzbank advanced 4.8%.
But Credit Agricole fell 2.8% after it posted a fourth-quarter loss that was worse than analysts had forecast as France’s biggest retail bank suffered from writedowns at its Greek and investment banking operations.
Adidas shares rose 2.5% after the world’s second-biggest sporting goods maker posted better-than-expected fourth-quarter results. But the company said it expected sales and earnings to fall in 2009.
Across Europe, Britain’s FTSE gained 1.7%, Germany’s DAX rose 1.6% and France’s CAC 40 added 1.5%.
The FTSEurofirst 300 hit the lowest point in its near 12-year history on Tuesday, while the STOXX 600 plumbed depths last seen in late 1996. On Wall Street, the S&P 500 .SPX ended below 700 points for the first time since 1996 October.
The stock debacle has accompanied a descent of top global economies into recession, and was sparked by a meltdown in US subprime mortgages that drove banks across the world to the brink of collapse. Corporate earnings have taken a hammering.
Banks and insurance shares have been the worst hit so far this year, with the DJ Stoxx European banking index and the DJ Stoxx European insurance index down 33 and 35% year to date.