Deutsche Bank AG (DB) - Get Report surged to the top of the German market leaderboard Thursday as investors extended financial sector gains on the back of a trillions in potential tax cuts from U.S. President Donald Trump and the strongest reading on European economic confidence in a decade.
Deutsche Bank shares were marked 2.9% by mid-day in Frankfurt and changing hands at a near six-week high of €14.52 each at the top of the DAX performance index, which priced 0.28 higher at 12,700 points. Domestic rival Commerzbank, the country's second-largest lender, gained 1% to trade at €11.62.
Around Europe, the Stoxx 600 Banks index, the sector benchmark, was priced 0.91% higher, extending its weekly gain past 3.15%, as investors being pricing-in faster moves towards normal monetary policy from the European Central Bank and deeper fiscal stimulus from the United States.
Evidence of that speculation came earlier this morning from the European Commission's closely-watched index of consumer and economic sentiment, with the latter reaching the highest level since July 2007. A reading of inflation expectations inside the survey also ticked higher, while consumers' outlook for the next two years surged to the highest since 2000.
German bank shares were also boosted by a report from Moody's Investors Service which maintained a "stable" outlook on the banking sector in Europe's largest economy, noting that "accommodative monetary policy, exceptionally low unemployment and modest wage increases will support domestic consumption and private household disposable income."