Banks shares lead market recovery

European stocks rebounded from a two-month low yesterday and Spanish bonds rose after an ECB official signalled that the bank may revive its bond-purchase programme.

The markets were encouraged by the declaration by Spanish prime minister, Mariano Rajoy, that Spain will not need a bailout.

Mr Rajoy, speaking in Madrid, said Spain faces a “huge” task generating jobs and growth as it looks to rein in its budget deficit. He said he wants to make it “as clear as day” Spain won’t need a bailout.