Stoxx 600 with first quarterly gain of the year
Shares of European lenders rose on the final day of a troubled week, erasing declines after Deutsche Bank AG swung to gains amid easing investor concern about its financial health.
The Stoxx 600 Banks Index advanced 0.6 percent at the close, reversing an earlier slide of 3.8 percent. Deutsche Bank erased a drop of as much 9 percent to rise 6.4 percent after a report it’s nearing a $5.4 billion settlement with the U.S. Department of Justice, less than half an initial request. The lender, which tumbled on Monday amid concerns about its capital buffers, fell anew earlier on Friday after a report that hedge funds moved to cut their exposure to it.
It’s been a rough week for European lenders, with worries about Deutsche Bank followed by job cuts at Commerzbank, a $1.1 billion lawsuit settlement for Royal Bank of Scotland Group Plc and prospects of cost reductions at Credit Suisse Group AG. The Swiss lender has fallen 3.2 percent this week, while Commerzbank is down 9 percent, the biggest drop among peers.
The banking index has fallen 1 percent this week and is down 2.7 percent in September, as a rebound from a four-year low in July ran out of steam. That soured its best quarterly advance since March 2015. The Stoxx 600 fell 0.7 percent this week, trimming its first quarterly gain of the year to 4 percent.
Oil trimmed a second monthly gain on OPEC’s plan to reduce output for the first time in eight years. Prices are up 5.8 percent for the month, heading for the first September increase since 2010. Iran will be exempt from the cuts and an OPEC committee will recommend production caps for members at a formal meeting in November after the deal was announced Wednesday. The agreement represented a “capitulation” to U.S. shale drillers, according to Warwick Energy Group, a privately held investor in thousands of oil wells. The jump in oil weighed on airlines.
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