FTSE remains near three-year lows, banks and miners weigh
Reuters
Published Feb 09, 2016 12:07
FTSE remains near three-year lows, banks and miners weigh
By Kit Rees and Sudip Kar-Gupta
LONDON (Reuters) - A fall in the shares of major banks and mining stocks kept Britain's top share index near three-year lows on Tuesday, as concerns lingered over the global economy and the health of the financial sector.
The blue-chip FTSE 100 index (FTSE), fell 0.3 percent to 5,671.35 points by 1151 GMT, remaining close to its lowest level in around three years.
A drop in heavyweight banking stocks such as Barclays (L:BARC) and HSBC (L:HSBA) curbed the FTSE's recovery, with the FTSE 350 Banks Index (FTNMX8350) index down 1.1 percent, hitting its lowest level since November 2011.
Mining stocks also fell sharply, with Anglo American (L:AAL) down 9.9 percent after Anglo American's Kumba (J:KIOJ) division posted lower profits, and Antofagasta (L:ANTO) falling 10 percent after Goldman Sachs (N:GS) cut its rating on the stock to "sell".
Signs of a global economic slowdown have hit world stock markets since the start of the year, and raised concerns about the stability of the European banking system.
"There are worries about global growth, and fears of a recession are starting to emerge. The banks are getting hit hard," said Richard Griffiths, associate director at Berkeley Futures.
Goldman Sachs analysts wrote that while there were no signs of any strain in terms of euro or U.S. dollar funding in money markets for European banks, market liquidity had nevertheless reduced.
Exane BNP Paribas (PA:BNPP) also cut its price targets on Barclays, HSBC, Lloyds (L:LLOY), Royal Bank of Scotland (L:RBS) and Standard Chartered (L:STAN), citing the pressures on the sector.
Among the top gainers, however, Legal & General (L:LGEN) was up 2.5 percent after it clarified its exposure on its bond portfolio as at Dec. 31, reassuring investors.
UK supermarkets were also in focus, with Tesco (L:TSCO) gaining 2.4 percent after data from Kantar Worldpanel indicated that the company's sales showed signs of improvement in the early weeks of the year, as the supermarket had its best outcome since September last year.
The data also showed that Sainsbury (L:SBRY) continued to outperform its rivals in the same time period and posted higher sales. Shares in the company advanced 0.6 percent.
Get The App
Likewise shares in WPP (L:WPP), the world's largest advertising company, rose 2.4 percent following a sell-off in the previous session.
JPMorgan (N:JPM) made a case for a higher valuation of the company, saying that the current valuation did not reflect its resilient earnings per share growth.
The FTSE 100 hit a record high of 7,122.74 points in April 2015 but has steadily lost ground since then. The index is down 20 percent from that record level and down nearly 10 percent since the start of 2016.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.