The Euro Stoxx Banks Index climbed 2.1% at 8:53 a.m. in Paris after tumbling 8.4% Wednesday, the most since March 2020, on mounting concerns over the health of Credit Suisse. The broader Stoxx 600 Banks Index gained 1.9%. 

Credit-default swaps showed easing tension in debt markets. Credit Suisse’s senior unsecured euro-denominated bonds due March 2029 recovered almost half of Wednesday’s losses, according to data compiled by Bloomberg.

Credit Suisse tapped the Swiss National Bank for as much as 50 billion francs ($54 billion) and offered to repurchase debt. The chairman of the firm’s biggest shareholder said in an interview with CNBC that the lender isn’t likely to seek more capital and the bank is generally “sound.” 

“Measures taken should provide some comfort that a spillover to the sector could be contained, but the situation remains uncertain,” Anke Reingen, an analyst at RBC Capital Markets, wrote in a note to clients Thursday. 

Credit Suisse rose 23% to 2.08 Swiss francs at 8:51 a.m. in Zurich. The biggest gainers in Europe included Commerzbank AG, Banco Santander SA, UniCredit SpA and Barclays Plc.

In a sign of easing tension in credit markets, the iTraxx crossover, which reflects the cost of insuring Europe’s junk-rated companies against default, fell the most in three months in early trading.

“The initial fallout has been contained by the SNB’s backstop overnight, but I think the cat’s out of the bag in terms of the lagged damaged that aggressive policy tightening can do to both the real economy and financial markets,” said Viraj Patel, a global macro strategist at Vanda Research in London. “There will remain a bit of nervousness in markets as investors wait to see what happens next.”

Market participants will be watching a monetary policy decision at 2:15 p.m. Frankfurt time by the European Central Bank. The ECB’s plan to raise interest rates by another half-point has been thrown into question by the banking turmoil that began last week in the US and has continued with Credit Suisse’s woes. 

Bloomberg Economics expects the central bank’s Governing Council to be more cautious than it previously signaled.

Fears of a contagion are overblown, said Mathieu Racheter, head of equity strategy at Bank Julius Baer & Co., though the market will remain nervous as its searches for “other weak links” after the collapse of Silicon Valley Bank and Credit Suisse’s woes.

“SVB issues appear idiosyncratic and investors are just in panic mode and selling the weakest links — Credit Suisse,” he said. “The latest developments will likely keep nervousness high.”