Banks Lead Shares Higher

Bank shares extended a rally on Wednesday after a strong performance on Wall Street, sending stock markets higher around the world.

The Stoxx Europe 600 was up 0.7% in the early minutes of trading, while the banking sector gained 1.4% as Italian lenders continued to drive market focus after Sunday's referendum.

Italy's FTSE Italia All-Shares Banks index was up 2.3% after gaining nearly 9% in the previous session, amid media reports that Italy was ready to take a controlling stake in Banca Monte dei Paschi di Siena. Shares in the troubled lender were up 9.5% on Wednesday, leading gains in the sector, while shares of UniCredit advanced 3%.

Bank shares elsewhere in Europe also rose, with Credit Suisse Group up 4.3%, Deutsche Bank up 3.2% and BNP Paribas up 2.5%. Global banks have performed well in recent weeks amid optimism that a steeper yield curve—a bigger difference between short- and long-term bond yields—and higher U.S. interest rates would boost lenders' profits.

Earlier, bank stocks rallied in Asia on hopes for a resolution in Italy, sending bourses to a higher close. Japan's Nikkei Stock Average rose 0.7% as the yen weakened against the dollar, while Hong Kong's Hang Seng added 0.6%. Australian stocks advanced 0.9%, even as data showed its economy contracted for the first time since 2011.

Futures pointed to a 0.1% opening gain for the Dow Jones Industrial Average and S&P 500. The rally in financial shares had already sent to the Dow to a second straight record close on Tuesday.

Write to Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

December 07, 2016 04:35 ET (09:35 GMT)

Credit Suisse (NYSE:CS)
Historical Stock Chart
From Mar 2024 to Apr 2024