Brave investors search for bank stock bargains

Mike McCudden, Head of Retail Derivatives at Interactive Investor, comments on investor activity in light of ongoing European instability:

"Markets have been like a see-saw reacting aggressively to new reports and rumours on a minute by minute basis. Edge of the seat stuff, and certainly not for the faint hearted. We have seen a wealth of activity both pre-market and during as investors line up at the roulette wheel chasing a bargain or two, trying to exploit oversold conditions and hammering those stocks that have so far missed the glare of the bears.

"Banks in particular have seen some fairly staggering volumes at Interactive Investor, changing by the hour in response to chat from the Euro area. There are not too many safe havens out there; it's out with the ordinary. Indeed, those stocks with a more macro exposure have been taking a beating.

"Sentiment from investors in the last hour is for no rate cut by the ECB, and an aggressive move in recapitalising the banks and getting money flowing again. However, an ECB cut is clearly still on the cards and may yet happen tomorrow.

"Will Merkel back Eurobonds? Will the banks be recapitalised in time? Will it be enough? Will the UK announce QE2 today or tomorrow? Will the ECB announce a rate cut tomorrow?... It's certainly keeping traders awake at their desks. Perhaps not time to back up the truck yet, as more twists and turns will unfold in the coming days - but for active traders this is this kind of volatility they live for."