Jefferies Group, the investment bank that has faced questions about its European exposure, said its fourth-quarter profit plunged 23% from a year ago as bond and equity trading revenues plummeted amid weak market conditions.

However, shares of Jefferies surged 21% to $14.33 in recent trading as the firm said it reduced its total balance sheet by nearly one-fourth to $35bn in total assets and decreased its leverage to 9.9:1 from 12.9:1. The firm's earnings also beat analysts' estimates.