UBS currently has a market value of over $42 billion and the rumoured bid marks a huge premium over the prevailing share price of the company.     

UBS shares rose by 4.2 per cent to 23 Swiss francs at Swiss Stock Exchange in Zurich, while it was trading nearly four per cent up in the pre-market trade in the US.     

Today's surge followed a fall of nearly six per cent in UBS stock yesterday at the New York Stock Exchange (NYSE).     

In contrast, HSBC shares dropped nearly one per cent at the London Stock Exchange to 7.96 pounds.     

When contacted, a UBS spokesperson said, "We do not comment on market rumours," while HSBC did not immediately respond to a query in this regard.     

Rumours about a possible tie-up has been long-standing in the European markets amid analysts foreseeing a need for consolidation in the financial services sector.     

Almost a year ago, rumours first surfaced about such a deal followed by another round in March this year.     

British daily The Independent wrote in a 'market report' on March 8 this year, "Mid-afternoon murmurs suggested that HSBC, the London-based global banking giant, was mulling a bid for UBS, its Swiss counterpart which has sufferred in the prevailing market turmoil."