Bank shares recover, sterling rises against dollar
Despite the bad news surrounding the economy this week, bank shares have recovered today following two weeks of heavy falls in the sector.
Following decent increases yesterday, shares in Barclays were up 12% to 99p earlier today, following a 73% surge yesterday. Shares in the bank closed today at 89p.
However, shares in Barclays are still below the 98p level they were trading at last Monday, prior to the Government’s announcement of a second bailout package.
Barclays staged a good recovery yesterday after chairman Marcus Agius and chief executive John Varley reassured investors that it was on target to announce profits of over £5.3 billion for 2008.
Royal Bank of Scotland closed 11% up today, while Lloyds Banking Group climbed 5%, up to 68.6p.
Shares in the above-mentioned banks all took a battering last week following rumours of nationalisation.
Meanwhile, sterling ended its week-long slump against the euro today and gained against the dollar, to $1.414, while one euro is now worth 93.0p.
Bad news today came from the CBI who revealed that retail sales volumes have fallen for the tenth consecutive month.
According to the organisation’s latest monthly Distributive Trades Survey, nearly half of shops (47%) reported a fall in sales in the first two weeks of January, and that 52% are anticipating a decline next month – the worst figure since the CBI started the series back in 1983.
Ian McCafferty of the CBI warned that retailers will continue to suffer this year as the recession takes hold and believes February will be challenging.