European stocks rebound on Spanish banking merger news
European stock markets rebounded Friday ahead of key US jobs data, shrugging off steep losses in Asia and overnight on Wall Street, with the financial sector boosted by Spanish banks Bankia and CaixaBank mulling a merger.
European bourses initially fell, extending the previous day's sell-off.
However as the morning progressed, they rebounded as many investors concluded that tech-driven US losses were rooted in profit-taking. In early afternoon deals, Madrid stocks rallied 1.6 percent, Paris won 1.1 percent and Frankfurt added 0.5 percent.
London gained 0.8 percent approaching the half-way stage. "The turnaround (in Europe) is due to a combination of factors-firstly, the realisation that yesterday's tech selloff was not a risk-off event, but a profit-taking exercise," said City Index analyst Fiona Cincotta.
"Secondly, (there is) consolidation in the European banking sector with Spain's Bankia and Caixabank looking to merge." Savings conglomerate Bankia indicated in a statement that it had made contact with CaixaBank "with a view to a potential merger", but no agreement has yet been reached. The deal would create a Spanish banking titan, with more than 650 million euros ($770 million) of assets, in a sector battered by the coronavirus' effect on the wider economy.
The news sent Bankia stock rocketing 30.5 percent to 1.35 euros and Caixabank surging 14.7 percent to 2.08 euros. The combined group would be Spain's third largest lender after Santander and BBVA-whose share prices also chalked up double-digit gains in Friday.
In London, NatWest, formerly known as Royal Bank of Scotland, jumped 4.1 percent to 109.25 pence to top the FTSE 100 risers leaderboard. Banks surged also in Paris and Frankfurt. Societe Generale shares leapt 4.9 percent to 13.59 euros and Credit Agricole won 3.8 percent to 8.76 euros, while Germany's Deutsche Bank gained 4.9 percent to 8.27 euros.
Elsewhere, Asian markets fell deep into negative territory Friday following painfully losses on Wall Street, where the tech sector finally succumbed to profit-taking after months of mind-boggling gains.
All three main indices in New York suffered hefty selling but the tech-heavy Nasdaq led the way with global titans such as Apple, Microsoft, Amazon and Facebook among the worst hit. The drop had been expected after the Nasdaq climbed around 80 percent from its March trough, with analysts warning that valuations were out of sync with economic realities.
India's latest military provocations on the China-India border are very different to that of
the Doklam stand-off in 2017, as it dispatched more troops and displayed an extremely aggressive posture with Chinese experts saying that Indian decision-makers have seemingly underestimated China's determination to protect its sovereignty.
Chinese analysts said New Delhi might believe that China is facing heavy pressure from the United States and focusing on handling tensions on its eastern side, such as in the Taiwan Straits and the South China Sea, so it assumes that it would be a good chance for India to push forward and force China to make a compromise.
If it succeeds, this would be a remarkable achievement for New Delhi to show off to its people and distract attention from the severe domestic COVID-19 epidemic and worsening economic situation, analysts told Global Times.
India's military activities have become increasingly aggressive in recent days, and border tensions see no sign of de-escalating.
According to Indian media reports, the Indian Army has changed its posture from border management to securing the border on the 1,597 km Line of Actual Control (LAC) in Ladakh, after the People's Liberation Army (PLA) added a military deployment in the region. India also deployed additional specialized forces such as the Special Frontier Force, and the Indian media said its soldiers have occupied, "key peaks on the southern bank of Pangong Lake."
Indian Army has paid special attention by deploying a combat group (a mix of armored and mechanized elements) on the Depsang Plains.
Indian Army Chief General Manoj Mukund Naravane has visited Leh, the largest town of Ladakh in India, to the west of Pangong Tso Lake, amid the ongoing face-off.