World Economy

Banks Lead Europe Stocks Up for 3rd Day

Banks Lead Europe Stocks Up for 3rd DayBanks Lead Europe Stocks Up for 3rd Day

European equities climbed for a third day, with investor confidence slowly coming back amid the calmest market in more than a year.

The Stoxx Europe 600 Index rose 0.5% in London, coming close to erasing its losses from last week. Banks headed for their highest prices since the UK referendum on European Union membership, with Italy’s UniCredit SpA up 4.9%, while Commerzbank AG and UBS Group AG added more than 3%. At the same time, a measure of volatility is recording its lowest monthly average since March 2015, Bloomberg reported.

European equities are recovering after their biggest weekly slide in two months. The Stoxx 600 came close to the level it reached on Aug. 11, its highest since May, amid a rebound that pushed almost all of its industry groups higher on Wednesday.

The gains are coming as investors await more clarity on the path of Federal Reserve interest-rate increases, with Fed Chair Janet Yellen speaking on Friday at the annual monetary policy symposium in Jackson Hole, Wyoming.

“It’s a good time for opportunistic investors,” said Pierre Mouton, a fund manager who helps oversee about $8.5 billion at Notz, Stucki & Cie. in Geneva. “A lot of prices were just too depressed and some people are clearly taking advantage of that. But it’s not like everyone is going on a full-risk on mode—they’re just testing the market for now. There’s a lot coming up on the agenda.”

The rally that lifted the Stoxx 600 as much as 12% since the Brexit vote was halted last week as concerns resurfaced over the European Central Bank’s ability to spur growth amid political turmoil and a banking crisis in Italy. A Bank of America Corp. report showed investors withdrew money from the region’s equity funds for a record 28th straight weeks. Economic data, though, have been beating forecasts, showing resilience after the UK decided to leave the EU. Euro-area figures for the services and manufacturing industries had the best reading in seven months on Tuesday, and Wednesday reports showed trade helped drive economic growth in Germany. The nation’s DAX Index added 0.4%, trimming its annual drop to 1%.