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Merger talk for two Spanish banks drove gains for European markets on Friday, with gains in the financial sector helping to smooth the nerves of investors rattled by Wall Street’s biggest selloff since early June. U.S. stock futures indicated further losses for battered technology stocks, though.
After tumbling 1.4% in a late-day slide, the Stoxx Europe 600 index SXXP, +0.66% was up 0.4% to 367.60. The index opened 0.9% lower. The French CAC 40 PX1, +1.06% and the German DAX DAX, +0.42% rose 0.2% and 0.6% each, while the FTSE 100 PX1, +1.06% rose 0.5%.
Spain’s IBEX 30 index IBEX, +1.50% climbed 0.9%, as shares of CaixaBank CABK, +13.85% surged 11% and Bankia BKIA, +29.06% climbed 23% after the Spanish banks said late on Thursday that they are in talks over a possible merger, potentially the biggest tie-up in the country’s banking sector in years.
That filtered through to gains for the rest of the sector, with shares of Sabadell SAB, +10.56% rising 11% and Bankinter BKT, +5.01% up 6%. Banco Santander SAN, -0.91% SAN, +3.46% and Banco Bilbao Vizcaya Argentaria BBVA, +1.42% BBVA, +4.19% shares rose over 3% each.
Financials were the best performing sector in Europe, but investors are keeping a focus on where U.S. markets will open later.
The Dow industrials DJIA, -2.77% tumbled by more than 800 points on Thursday, driven by a tech-led selloff that wiped 5% off the Nasdaq Composite COMP, -4.96%. Along with the S&P 500 SPX, -3.51%, all three indexes marked the worst one-day drop since June 11. Stock futures hinted at modest gains for Friday, apart from techs, with Nasdaq-100 futures COMP, -4.96% off 0.4%.
Investors are waiting for important U.S. jobs data. Economists polled by MarketWatch expect 1.2 million jobs were added in August, but that hiring has slowed compared with early summer.
In Europe, data showed German manufacturing orders losing steam in July, though they rose for the third-straight month.
One notable element of Thursday’s trade was that the standout advancers this year were among the worst performers. Some of that selling continued on Friday, with communications company Sinch SINCH, -0.86% dropping 3.5% after falling nearly 10% on Thursday. But delivery service firm Delivery Hero DHER, +2.23% rebounded with a near 2% gain after an 8% prior-day slump.
Elsewhere, shares of Ryanair Holdings RYA, +4.03% rose 1.6%. The cut-rate airline said it raised €400 million ($474.1 million) via a slightly discounted share placing late on Thursday. The airline is seeking to preserve cash and boost its financial position in an industry heavily damaged by the global pandemic. Shares of rival easyJet EZJ, +3.08% climbed 1.2%.
