A Fine Day

European stocks were trading at their highest levels in more than two months on Wednesday, driven by a surge in bank shares on hopes of a state-backed rescue for struggling Italian lenders and as Credit Suisse said its restructuring plan in working. Likewise on Wall Street, the Dow and S&P500 hit all-time highs in intraday trade ahead of a key meeting of European and US Central banks that have kept investors on a cautious footing.

JP Morgan, HSBC and Credit Agricole Penalized

Financials and basic materials were the top gainers on Wednesday. Among financials, Credit Suisse shares soared and were on course for their strongest gain since April. The Swiss bank lowered its 2018 pre-tax income targets for its Asia Pacific and international wealth management divisions. It also reported more than 1 billion Swiss francs in extra cost cuts, according to Reuters. Credit Suisse shares were up 6.5% on the news.

In other news, European Union regulators have hit HSBC Holdings, J.P. Morgan Chase and Credit Agricole with fines totalling €485 million for rigging the Euribor benchmark, as European Union antitrust regulators wrapped up a five-year investigation into the scandal. EU antitrust authorities said the banks participated in a cartel that aimed to steer a benchmark interest rate.

The trio colluded to rig the Euribor rate and exchanged sensitive information to suit their trading positions in correlated derivatives markets, in breach of EU antitrust rules, the European Commission said on Wednesday in an e-mailed statement. JPMorgan was fined €337.2 million, HSBC got a €33.6 million penalty and Credit Agricole must pay €114.7 million.

But despite this news, shares of HSBC and Credit Agricole traded 3.3% and 0.6% higher respectively. But shares of JP Morgan chase were 0.43% lower.

Meanwhile, Italian bank stocks continued climbing on Wednesday after reports emerged that fanned air into the flames that the Italian government is taking steps to rescue Banca Monte dei Pasci Siena, and other struggling lenders.

Investors also looked ahead to a key ECB meeting, in which the central bank is largely expected to extend its quantitative easing program beyond March 2017, particularly after a Sunday referendum in Italy left the country's banks in a vulnerable spot.

Pfizer Hit With Record Fine

Britain's competition watchdog has fined Pfizer a record £84.2 million for its role in ramping up the cost of an epilepsy drug by as much as 2,600 percent. The Competition and Markets Authority (CMA) also fined Flynn Pharma £5.2 million for overcharging for phenytoin sodium capsules, following a dramatic price hike in 2012.

Shares of Pfizer tumbled on the news, but recovered some ground during the session, to close 2.8% lower.