European stocks inch towards record high with banks in lead

2021 03 16

European shares headed towards record highs on Tuesday on hopes of a vaccine-driven economic recovery, while investors looked past the fallout of a U.S. hedge fund default that hit banking stocks a day earlier.

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, March 29, 2021.

The pan-European STOXX 600 index gained 0.5%, trading less than a percent below its pre-pandemic peak.

Bank stocks jumped 2.0%, rebounding after a 1% drop on Monday, as U.S. and European government bond yields rose on hopes of stronger economic growth and inflation ahead.

Swiss lender Credit Suisse gained 1.5%, following its near 14% slide in the previous session as it warned of “highly significant and material” losses after the fund, named by sources as Archegos Capital, defaulted on margin calls.

“Though Archegos uncertainties are still hanging over the markets, European investors felt settled enough to push the region’s indices higher,” Connor Campbell, a financial analyst at SpreadEx, said in a note.