European Stocks Rebound on Easing Banks Tax Concerns

On Wednesday stock markets in Europe were higher as investors tried to recoup recent losses while evaluating more quarterly corporate earnings.

The FTSE 100 in the U.K. climbed 0.8%, the CAC 40 in France gained 1.3% and the DAX index in Germany traded 1% higher.

On Wednesday sentiment in Europe was boosted by gains in the banking sector, as shares bounced after the sharp losses of the previous session after the unexpected announcement by the government of Italy of a 40% windfall tax on its banks, which pushed European stock markets lower sharply.

Late on Tuesday the Italian authorities clarified the situation and stated that the new tax wouldnt be more than 0.1% of the total assets of a lender.

On Wednesday the major lenders in Italy, Intesa Sanpaolo, Banco BPM, and UniCredit, all rose by more than 2%, pushing the wider European banking index up.

The earnings season continued on Wednesday, and Ahold Delhaize stock fell 2.7% after the Dutch supermarket chain's net profit for Q2 was less than expected even as the company increased its guidance for free cash flow for this year, helped by growth in online sales and loyalty.