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European shares bounce back helped by bank merger talk

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European shares bounce back helped by bank merger talk
FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 28, 2019. REUTERS/Staff/File Photo   -   Copyright  STAFF(Reuters)
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MILAN (Reuters) – European shares recovered on Monday with merger talk lifting the battered banking sector and helping offset lingering worries over a slowdown in the global economy, while a crash of a Boeing 737 MAX hit shares in its French engine maker Safran.

The pan-European STOXX 600 index was up 0.3 percent by 0831 GMT, having hit its lowest since Feb. 21 on Friday, while Germany’s DAX was up 0.4 percent.

London’s export-heavy FTSE added 0.7 percent, outperforming its euro-zone peers boosted by stronger oil prices. [O/R] Sterling was also weaker amid uncertainty about the nation’s exit from the European Union as Parliament prepared to vote on the government’s Brexit deal. [FRX/]

German lender Commerzbank was the biggest gainer on the STOXX 600, up 4.1 percent, following fresh reports at the weekend over a possible tie-up with Deutsche Bank , which also rose 2.1 percent.

The management board of Deutsche has agreed to hold talks with Commerzbank on the feasibility of a merger, a person with knowledge of the matter said on Saturday.

Merger hopes lifted Charter Court Financial and OneSavings Bank up 6.6 percent and 8.4 percent respectively after the two UK challenger banks said they were in advanced talks about a possible all-share tie-up.

Safran fell 1 percent following Sunday’s fatal crash of a Boeing 737 MAX 8 operated by Ethiopian Airlines. The 737 MAX 8 uses LEAP-1B engines made by a joint venture of General Electric Co and Safran SA.

Shares in Boeing rival Airbus edged up 0.4 percent, while Frankfurt-listed Boeing shares were down 7.6 percent.

Among the top fallers was Pandora, down 6.4 percent with traders citing a downgrade to sell from Carnegie.

(Reporting by Danilo Masoni; editing by Josephine Mason)

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