LONDON, Nov 13 (Reuters) - European shares rebounded late on Tuesday in tandem with gains on Wall Street as a fresh round of trader speculation that Spain may be close to asking for a sovereign bailout fuelled appetite for financials.
The FTSEurofirst 300 provisionally closed up 5.39 points, or 0.5 percent, at 1,099.74, bouncing off a low of 1,086.37. Spain’s IBEX index rallied 1.7 percent, meanwhile, while its bond yields eased slightly.
“There is talk doing the rounds of a Spain bailout fuelling the markets, but we have been here before only for nothing to come to fruition and I am very sceptical,” one London-based trader said.
Spain’s dilemna over whether to become the fourth euro zone member to take a bailout remains acute as it would mean more austerity and hardship for its already embattled citizens.
As a result of the talk, banks and insurers - sectors with the most direct exposure to the euro zone debt crisis due to their holdings of sovereign debt - rose 1.7 percent and 0.9 percent higher, respectively.