A bounce back in the banking sector helped European stock markets rally higher after recent heavy losses.
London’s FTSE 100 Index rose 1%, up 58.8 points to 5691, while indices in France and Germany were also staging a rebound, with the Cac 40 and Dax up more than 2%.
Banking stocks were fighting back after sharp falls in the previous two sessions amid fears of an impending crisis as investors fretted over the sector’s ability to withstand slower global growth.
German banking giant Deutsche Bank, which saw shares fall to a 30-year low on Tuesday, surged as much as 17% on cheer over reports it is looking to boost its balance sheet strength.
The group is said to be considering launching an emergency bond buyback, just a day after its boss assured its balance sheet was “rock solid”.
London-listed banks were also making gains, with Barclays lifting 3%, or 4.3p to 160.6p, Royal Bank of Scotland up 6.6p to 232.2p and HSBC 8.2p ahead to 440.7p.
Other financial stocks were also on the front foot, with insurer Prudential leading the FTSE 100 higher with a rise of 7%, or 74p to 1200p.
The wider market gains come after the FTSE 100 sunk to its lowest close for over three years on Tuesday.
Stocks shrugged off disappointing UK economic figures showing UK industrial production suffered its worst monthly performance since 2012 in December.
The Office for National Statistics said industrial production fell by 1.1% during December, which left the sector nursing a 0.5% drop in the final quarter as record mild winter weather hit demand for energy.
Sentiment was helped as oil prices edged higher, with Brent Crude at just under 31 US dollars a barrel.
Among stocks, model rail firm Hornby saw its stock market value more than halve after it warned over mounting losses following “disappointing” new year trading.
The group now expects to post “substantially” wider underlying pre-tax losses for the full year, at between £5.5 million to £6 million, and revealed a £1 million write-off after reviewing its stock and balance sheet.
Shares plunged 52%, or 42.3p to 38.8p.
Elsewhere, the owner of Pinewood Studios – home to the James Bond and Star Wars films – saw shares surge 19% as it said the business could be sold to “maximise value” for shareholders.
Pinewood Group has appointed investment bank Rothschild to carry out a strategic review of the business that “could include a sale of the company”, which has a market value of around £258 million.
Shares jumped 82.5p to 527.5p.
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