Portuguese stocks rebound to recover most of their steep losses from the previous session, led again by banks, after the centre-right government defeated a motion of no confidence, with bottom-fishing overpowering fears of further political instability for now.
"Banking stocks were really oversold and yesterday's falls were probably exaggerated, so it's natural there's a rebound. The next few days will show if it was just a pullback or if it's something bigger... the political uncertainty remains until the constitutional court decision is revealed," says Paulo Rosa, a trader da Golbulling brokers in Porto.
Although the government defeated a no confidence motion on Wednesday, the move united all the opposition in parliament against austerity policies and added to concerns the government's budget plans - required under the terms of under an EU/IMF bailout - may suffer defeat in the Constitutional Court.
Lisbon's PSI20 stock index is up 2.7 percent following Wednesday's 3.5 percent slump - the deepest fall since last year. The largest listed banks, Millennium BCP and Banco Espirito Santo are up 7.2 percent and 6.5 percent, respectively, following falls of over 8 percent on Wednesday.
Reuters messaging rm://filipa.lima.thomsonreuters.com@reuters.net
