European stocks rebound as banking jitters ease

European stocks rallied in early deals on Monday, as calm descended on markets following a turbulent week for banking shares that was fuelled by worries about stability in the sector after the collapse of Credit Suisse and Silicon Valley Bank, Reuters reported.

The pan-European STOXX 600 index rose 1.3% by 0705 GMT, with investors drawing comfort from news that First Citizens BancShares Inc would acquire Silicon Valley Bank’s deposits and loans.

European banks jumped 2.8% after shedding 3.8% on Friday when Deutsche Bank sparked a rout in the sector. The German lender’s shares were up 6.1% after tumbling 8.5% on Friday.

Shares of Swiss bank UBS, which took over Credit Suisse in a rescue deal last week, added 2.5%, but still remained about 15% below the pre-deal levels.

Credit Suisse rose 3.6%. Swiss financial regulator FINMA said over the weekend that it was considering whether to take disciplinary action against the bank.

Novartis climbed 4.9% after the Swiss drugmaker said its Kisqali breast cancer drug had been shown to cut the risk of recurrence in women who were diagnosed at an early stage of the disease.