Banks led European stocks higher on Thursday as bond yields recovered.
The Stoxx Europe 600 SXXP, +0.65% rose 0.6%, with gains for lenders including KBC Group KBC, +1.48% and the Bank of Ireland BIRG, +2.45% as the yield on the 10-year U.S. Treasury TMUBMUSD10Y, 1.498% rose to 1.50%. Yields had fallen as low as 1.37% as recently as Monday.
Credit Suisse CSGN, +2.30% rose 2%, as Berenberg upgraded the Swiss wealth management giant to buy from hold, saying valuation is “on its knees” due to the Archegos and Greensill issues, with the bank trading at a 26% discount to the broader sector.
“So overall, markets for now seem to be more relaxed again about the Fed and inflation risks, even if they’re still pricing in a faster hiking cycle than the Fed themselves indicated in the dots last week,” said strategists at Deutsche Bank led by Henry Allen.
The Bank of England will announce its latest monetary policy decision at midday London time, with investors awaiting word on whether the central bank will announce the end of its asset purchases before the scheduled date of December.
Economic surveys continued to point to reopening optimism. The German Ifo business climate index exceeded expectations with a rise to 101.8 in June from 99.2 in May. The French INSEE business climate index rose 5 points to 113, its highest level since the middle of 2007.
Tecan Group TECN, +10.99% jumped 12%, as investors warmly greeted news the laboratory-instrument maker was buying Paramit Corp. from private-equity firm Altaris Capital Partners for $1 billion. Paramit is expected to generate $50 million in operating profit on sales of $280 million this year, and Tecan said the deal would immediately and significantly boost earnings per share.
Siemens’ SIE, -0.50% shares slipped 1%. The German business conglomerate increased its revenue growth target.