Hopes of easier bailout terms for Portugal and Ireland boost financials and airline stocks soar too. But the lack of a growth plan in Europe will hit banks profitability, says CMC Markets' Michael Hewson.

SHOWS: LONDON, ENGLAND, UK (APRIL 10, 2013) (REUTERS - ACCESS ALL)

1. CMC MARKETS MARKET ANALYST, MICHAEL HEWSON SAYING:

(QUESTION: you're still not quite so bullish on the European banks, are you?)
No, I'm not. I mean you've got to set it in the context of the growth prospects for the Eurozone area going forward, Jamie. And if you take Germany out the equation, and there is some evidence we're getting a bit of a slowdown there, there's not a great deal of transparency about some of these banks' balance sheets. There's still obviously concern about further depositor haircuts in smaller countries like Slovenia and Greece. And you also have to ask yourself, where is the growth going to come from in the Euro area going forward for the next 12 to 18 months? And really, I think if you're going to look at banks' profitability going forward, you need some semblance of economic growth. And at the moment, there's no evidence that EU leaders have a growth plan of any shape or form.
(QUESTION:Okay. Well, that's the banks. Another sector doing quite well today is airlines. And Citibank upgraded EasyJet to a buy today. Their shares were up 6% earlier.)
Yeah, absolutely. I mean EasyJet has been one of those success stories over the past 12 months. The shares are up massively over the past 12 months. And since December, they're actually up 50%, they're around about 710p. They've been as high as 1100p, they're now around about 1060p. And yeah absolutely, great company EasyJet. Carolyn McCall has done a fabulous job in basically pushing up profitability there. But I have to ask myself really, is another 20% rise in the share price warranted at these levels when you've got a dividend yield of around 2%?
(QUESTION: Another airline doing particularly well, Air France KLM up 7%. They're even outperforming EasyJet. Do you think Air France KLM is quite a success story as EasyJet is?)
I might have to say no. I mean the reason the share price of Air France KLM is up, they posted some very good March passenger traffic numbers despite the bad weather. And the airline sector broadly is doing very, very well today. I would suggest that certainly with respect to Air France KLM and EasyJet, I'd probably be a buyer of EasyJet on dips. I think Air France KLM still have a number of issues that they need to work through. But overall, it's been a fairly good day for airlines.