Frankfurt - German stocks regained some ground Wednesday, with nervous investors encouraged that Washington had agreed to bail out the insurance giant American International Group (AIG) with 85 billion dollars.

By mid-morning, the DAX index was running at 6,017, up 0.9 per cent, with investors piling into German bank stocks despite continuing concern Wednesday in London about the outlook for a British bank, Halifax Bank of Scotland (HBOS).

Deutsche Bank pulled 2.1 per cent higher to 52.83 euros and Commerzbank, which had slumped 22 per cent in the past few days, rebounded 3.4 per cent to 14.44 euros.

Allianz shares rose 2.6 per cent to 100.56 euros amid news reports that the German insurer had posted a bid in vain two days earlier for parts of AIG. Observers said Allianz might obtain valuable assets if AIG sells parts of its business. dpa