A Sharp improvement in sentiment in the recently rocky financial sector sent Zurich shooting up 7.8 per cent, one of its largest single-day rises. The SMI index rose 397.2 to 5,523.7, but traders noted that this came after a precipitous 39 per cent plunge from its July 21st peak.
Financials led the rebound. UBS shot 29 francs higher to Sfr315 as Lehman Bros raised its recommendation on the stock. CS Group jumped Sfr20.50 to Sfr170.50.
Paris stormed higher with the CAC-40 index reversing a five-day losing streak with a gain of 156.5 to 3,136.48.
Banks led the upturn, but volumes were moderate and much of the rally was said to have stemmed from short covering. BNP rose 37.80 francs to Ffr300.90 and Societe Generale Ffr53 to Ffr589, gains of 14.4 per cent and 9.9 per cent respectively.
There was clear support from the heavyweights. Renault rose Ffr14.90 to Ffr199.90 and France Telecom gained Ffr22 at Ffr400. Frankfurt roared ahead in a technical recovery from recent heavy losses. Banks and dollar earners led the advancers. The Xetra DAX index was 214.40 higher by the close of electronic trade at 4,185.39. The early strength of Wall Street provided further impetus late in the session.
Among the banks, Hypo-Vereinsbank jumped 12.80 deutschmarks or more than 12 per cent to DM125.80, Commerzbank added DM2.49 to DM45.50 and Dresdner Bank climbed DM3.15 to DM62.60. Deutsche Bank was DM5.21 higher at DM88.46, in spite of its profit warning for third-quarter results after the market closed on Monday.
Software giant SAP recovered some of its recent heavy losses, rising DM39 to DM660, after J.P. Morgan issued a bullish third-quarter profit forecast and repeated its buy rating.
