Bank shares are recovering again in the Dax

NAfter Friday’s sell-off, bank stocks started Monday’s trading strongly recovered. The paper of German bank increased by 7 percent at the top, and Commerzbank was also clearly in the black.

Concerns about a deeper financial crisis caused Deutsche Bank shares to plummet by up to 15 percent on Friday. The Commerzbank papers also fell significantly. That also has the leading German index dax at the end of the week below the psychologically important mark of 15,000 points.

Banks increase sharply at the start of trading

On Monday all that seemed to be forgotten. The Dax started at 15,140 points in the Xetra trading. Deutsche Bank’s shares rose sharply with high turnover in the first few minutes of trading.

A share of Germany’s largest commercial bank was temporarily worth EUR 9.08, but then the price dropped again, only to approach the EUR 9 mark again towards the end of the second hour of trading. It was the same with the Commerzbankwhose shares hit an intraday high of 9.34 after trading at €8.98 on Friday.

The purchase of Silicon Valley Bank by US bank First Citizens Bancshares was also well received. U.S.-listed First Citizens shares are up more than 10 percent premarket. The US regional banks Pacific West and Keycorp, which are listed in Frankfurt, gained around 16 percent and 10 percent respectively.

Credit default swaps remain at a very high level

But there were also warnings against excessive optimism. “Banks’ credit default swaps (CDS) are only just below the level at the height of the European debt crisis in 2013, said Naeem Aslam, chief investor at wealth manager Zaye, according to Reuters news agency. “If these don’t normalize, the stock market will suffer for several more days.”

However, investors hardly reacted to the surprising increase in the Ifo business climate index in March. The Ifo index rose to 93.3 points from 91.1 points in the previous month. A drop to 91.0 points was expected.

In the third hour of trading, the Dax was up 1 percent at 15,106 points. The European leading index Euro Stoxx 50 gained 0.7 percent to 4159 points.