ROLLERCOASTER: European stocks yo-yoed into the weekend

Rollercoaster

Flickr / Geff

Stocks across Europe rode a rollercoaster on Friday, crashing in early trade before rebounding sharply to close as the woes of Germany's biggest bank, Deutsche Bank dominated market narratives on the final day of the year's third quarter.

Deutsche shares collapsed this week, falling to several record lows, as investors began to fear that the bank could collapse under the weight of a proposed $14 billion fine from the US Department of Justice.

Bloomberg News reported last night that about 10 hedge funds have moved to limit exposure to the bank and have withdrawn funds, which caused Deutsche's shares to plunge in US trade. That fall has continued on Friday, with the bank's shares passing below €10 each for the first time in history in early trade in Frankfurt, dropping more than 8%. 

However, on Friday afternoon rumours began to circulate that the bank had reached an agreement to settle its fine with the DoJ for roughly $5.4 billion, sending shares sharply higher in late trading. Deutsche shares closed the day up by almost 7.6%, a near 16% swing from the open.

Stocks across the board followed a similar pattern, with the financial services sector in particular feeling the pain in the morning before fighting back.

At the close, the Stoxx index of European banking shares opened almost 4% down, but eventually closed higher by more than 1% as the sector looked positively on rumours of Deutsche's deal with the DoJ. Here's how the index looked at the close (note the massive rebound):

Screen_Shot_2016 09 30_at_16_44_39

Flickr / Geff

On a bank-by-bank basis, only a handful of lenders finished the day in negative territory after almost every single banking stock fell during the morning. One major exception was Germany's Commerzbank which fell 1.2% after news that it plans to axe almost 10,000 jobs.

Here's the scoreboard from some of the continent's top banks

• Unicredit — up 1.77% having been down more than 6%

• Societe Generale — down 0.11% having been down 5%

• Credit Agricole — up 0.95% having been more than 4.5% lower

• Santander — down 0.1% having been down 6%

• Barclays — up 0.06%

• Royal Bank of Scotland — up 0.90%

However, it is not only the banking sector that witnessed a substantial bounce back on the day, with all of the continent's major share indexes significantly higher in the afternoon than in the morning. Several indexes opened more than 2% lower, but eventually closed in positive territory, with Germany's DAX swinging almost 3% from open to close. Here's the scoreboard:

Screen Shot 2016 09 30 at 16.54.07

Flickr / Geff

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See Also:

• Deutsche Bank's rally ran out of steam on Thursday

• Deutsche Bank rode a rollercoaster on Wednesday

• REPORT: Deutsche Bank is close to a $5.4 billion settlement with the US government

SEE ALSO: REPORT: Deutsche Bank is close to a $5.4 billion settlement with the US government