European shares have begun the week on the back foot with the financial sector weighing on the FTSE 100, which is trading lower by 23 points at the time of writing. The pound is also lower on balance as attention for sterling traders turns to Wednesday’s annual budget.
Deutsche Bank (DE:DBKGn) seek to raise capital
News over the weekend that Deutsche Bank will reverse course less than two years into CEO John Cryan’s strategy has been met with a negative reaction from investors this morning, as the stock has declined by more than 5%. The overhaul announced measures that include offering 8 billion euros in stock, selling part of the asset management business and reintegrating Postbank in a move that Cryan described as a “brave step of admitting we were going in the wrong direction.” The effect of this can be seen in London with RBS (LON:RBS), Lloyds (LON:LLOY) and Barclays (LON:BARC) all experiencing some selling since the open.
Miners fall after China GDP target cut
Elsewhere, Anglo American (LON:AAL) and Rio Tinto (LON:RIO) are the two worst performers of the miners this morning as the sector is also contributing to the broader declines seen on the leading UK stock benchmark. The primary reason for the declines are likely due to the Chinese government cutting its growth target to the lowest level in more than two decades. According to state-run news agency Xinhua, the communist party government will aim for annual growth of around 6.5% for the world’s second largest economy in a revision that China’s premier Li Keqiang described as “realistic and in keeping with the economic principle.”
Merger rumours see fund manager’s stock soar
Standard Life (LON:SL) and Aberdeen Asset Management are expected to announce detailed plans for their £11bn merger today, with the proposed deal expected to create the second-largest fund manager in Europe if it goes through. The markets have reacted positively to the news with Standard Life the best performing stock on the FTSE 100 and higher by just shy of 6% whilst Aberdeen Asset Management has seen its share price rise by approximately 4.5%. The new company would have £660bn in combined assets under management and is expected to lead to cost savings in the region of £200m - largely due to operational and back-office synergies.