The ceasefire with Iran sparks a strong rally in European bank stocks

Société Générale leads the charge as heavyweights take the front

Société Générale emerges as the driving force of the rally with a jump of 10.46%, followed by BNP Paribas (+8.56%) and ING (+6.73%). Crédit Agricole (+6.49%), KBC (+6.03%), and ABN Amro (+5.51%) complete a uniformly optimistic picture. The momentum extends beyond just the banking perimeter: the broader Bank/Insurance sector, comprising 18 stocks, gains 6.03%, with all components rising.

The geopolitical context largely explains this movement: the ceasefire announced this morning between Washington and Tehran, along with the prospect of reopening the Strait of Hormuz, triggered a 15% drop in Brent, bringing it back under 100 dollars. This easing of energy tensions alleviates part of the inflationary risk that weighed on European economic prospects—a scenario directly favorable to banks, whose credit portfolios are sensitive to economic conditions. The CAC 40, up 4.71%, and the SBF 120 (+4.61%) reflect this general relief, but the banks capture the bulk of the outperformance, indicating that the market is reassessing their macroeconomic risk profile upward.

Technical rebound or fundamental recovery: what sector signals indicate

For investors, the key question is whether this spectacular session marks the beginning of a sustainable movement or just a simple rebound. Several technical elements provide clues. The weighted sector RSI, at 41, is in a neutral zone, far from any overbought conditions—meaning the sector still has room to grow before entering overbought territory. The sector's weighted average price is above its 50 and 200-day moving averages, indicating a medium-term upward momentum and a favorable long-term trend, despite the recent correction. The sector MACD, having crossed above its signal line, confirms a restart of the bullish dynamic. However, several individual RSIs remain low—ING at 34, KBC at 32, and ABN Amro at 36—suggesting these stocks are emerging from a significant correction phase. Hence, today's session is more of a rebound after a period of stress than a continuation of a cruising trend. The sustainability of the movement will largely depend on the realization of the ceasefire and the effective reopening of the Strait of Hormuz, with talks set to begin on Friday in Pakistan.