Robust profits from two of Europe's biggest banking groups – HSBC and BNP Paribas – helped drive up stock markets yesterday, as investors continued to correct their underweight stance on the financial sector.
The FTSE Eurofirst 300 closed up 2.6 per cent, with Europe's leading banks notching up a 3.9 per cent gain. That echoed strong performances last week when markets welcomed the results of European bank stress tests. Wall Street was also higher yesterday, with the S&P 500 gaining 2.1 per cent by midday, helped both by the bank results and healthy manufacturing news in the US and Europe.
HSBC's 121 per cent pre-tax profit rise, to $11.1bn, for the first six months of 2010, sets the tone for a stream of UK bank results this week that are expected to be positive.