FRANKFURT (dpa-AFX) - In a market environment that remained friendly, cyclically sensitive bank shares extended their recent gains on Wednesday. The European sector index rose by an above-average 1.6 percent and is now trading at the same level as at the end of February. In Germany, Deutsche Bank shares were among the best performers on the Dax, rising 2.9 percent. The German benchmark index rose by 1.3 percent.

Commerzbank shares soared 3.5 percent to 9.592 euros in the mid-cap MDax index. In the meantime, they had reached their highest level since June 2018.

Stockbrokers also attributed the jump in Commerzbank's share price to a positive analyst comment from Warburg Research. The expert Andreas Pläsier had raised the price target for the shares from 8.20 to 10.70 euros. According to the expert, the bank's net profit forecast for the past year is likely to be topped. At 1.2 billion euros, it should exceed the originally advised target of "more than 1 billion euros." The fourth quarter should have benefited from higher net interest income.

The recent rise in yields on the capital markets is a sign of the interest rate turnaround observed worldwide in view of the sharp rise in inflation in many countries. Although this has eased somewhat recently, it is still high by historical standards. Higher interest rates in the wake of a continuing restrictive course of central banks should strengthen the earning power of banks.

Meanwhile, the cyclically sensitive bank stocks were also supported by encouraging economic data in midweek. Corporate sentiment in the euro area continued to improve at the end of last year, as shown by the rise in S&P Global's purchasing managers' index in December.

According to Joe Hayes, an analyst at S&P Global, the sentiment data suggest that the economy is likely to contract less than initially expected. "In all countries covered by the survey, the downward trend lost momentum, led by Germany, whose economy had weighed most heavily on the euro area in the second half of 2022," Hayes said. As the economy regains its footing, fewer loan defaults could threaten banks./la/bek/mis