European bank stocks fell by as much as 4% at one point last month, before staging a strong recovery to end September with a gain of 2.6%, while U.S. banks ended the month down 3%.
Hedge funds began adding long positions in European banks, insurance companies and capital markets firms in August, reaching a 12-month high by Sept. 21, the bank said. "Those areas of the market where HF ownership was lightest entering the week ultimately ended as the most net bought," the note said.Both long and short exposure to all European stocks still sat at relatively low levels for U.S. and European hedge funds.
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