Banks Lead Rebound in Europe Stocks, Trimming 4th Weekly Losses

  • Energy companies rally the most since Feb. 26 as oil gains
  • Industries that had led the advance down the most this week

Lenders and energy producers helped lift European equities from their lowest levels since February, giving some respite to traders witnessing the longest stretch of weekly declines since 2014.

With a 1.2 percent advance, the Stoxx Europe 600 Index pared a fourth week of slides. Almost all of its industry groups rose on Friday, with Italian banks leading the industry to its biggest gain in almost a month. Energy and commodity producers rallied more than 3 percent as groups as oil extended a weekly jump.

While stocks climbed on Friday, the rally that pushed them up from a Feb. 11 low has been losing steam amid renewed concerns over the strength of the global economy. The Stoxx 600 fell 4.8 percent from its high on March 14 through Thursday’s low, taking its valuation to 14.5 times estimated earnings, near the lowest in more than a year relative to U.S. equities.

“Markets are so unpredictable right now -- there are risk-on days and there are times when everyone exaggerates the negatives,” said Dirk Thiels, head of investment management at KBC Asset Management in Brussels. “Maybe a better earnings season can change that, but right now you don’t need a lot for markets to get nervous.”

A Bank of America Merrill Lynch measure of financial stress is heading for its biggest weekly advance since February, reaching levels not seen in almost a month. European automakers, miners and banks -- among the industries that led the last rebound -- were the ones hit the most this week.

UniCredit SpA surged 9.7 percent on Friday, the most since February, after its chief executive officer said financial institutions in Italy are “intensively” working on a solution that would see private investors participate in a fund aimed at supporting the recapitalization of troubled lenders. Banca Popolare dell’Emilia Romagna SC and Banca Monte dei Paschi di Siena SpA also climbed more than 7.5 percent.

The moves sent Italy’s FTSE MIB Index up 4.1 percent, the most in almost a month, for the biggest advance among western-European markets.

Axel Springer SE jumped 8 percent after JPMorgan Chase & Co. raised its rating on the stock to the equivalent of a buy. Air France-KLM Group added 2 percent after reporting an increase in passengers for March.

Royal KPN NV was one of the less than 90 shares in the Stoxx 600 that fell. It slid 2.8 percent after Bloomberg reported that competitor Deutsche Telekom AG is considering restyling its struggling Dutch business.

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