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24th of August 2011
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Barclays Bank leads London sector lower

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by Elaine Frei
Barclays Bank leads London sector lower

European equities markets were lower Wednesday on concerns that Greece will default without another bailout deal soon.

The concerns took banks lower in London, led by a 2.7 percent decline by Barclays Bank (LSE: BARC), after finance ministers failed to agree to a German plan in which bondholders would share part of the cost of a new bailout package for Greece and after Moody’s Investors service said it is reviewing the credit ratings of three big French banks over their exposure to Greek debt.

The FTSE 100 was down 1.04 percent to 5,742.55 in London, while the FTSE 250 dropped 0.83 percent to 11,763.4 as the energy and insurances sectors joined the banking sector in seeing no gains among its constituents.

There was only one gainer in the utilities sector, and miners, homebuilders, the food and beverages sector, the health care sector and the media sector all saw just two gainers each, while there were only three gainers in the retail sector and the financial services sector and the travel and leisure sector saw just four gainers each.

Despite the wide declines in the travel and leisure sector, however, it managed to provide the two biggest gainers on the 100 as travel agent TUI Travel (LSE: TT) added 1.8 percent and hotels and restaurants operator Whitbread (LSE: WTB) was up 0.59 percent, while the other two gainers included gambler Ladbrokes (LSE: LAD) was up 0.94 percent and brewer and pubs operator Marstons (LSE: MARS) was up 0.3 percent but another pubs operator, Enterprise Inns (LSE: ETI) was the biggest decliner in the sector, dropping 2.86 percent.

Manufacturing and engineering holding company Senior (LSE: SNR) was the best performer on the 250, gaining 2.33 percent, while Gem Diamonds (LSE: GEMD) had the worst day on the 250 as it dropped 7.49 percent and commodities trader Glencore International (LSE: GLEN) dropped 5.4 percent as the worst performer on the 100.

Credit-check specialist Experian (LSE: EXPN) was down 1.94 percent on the possibility that the US Consumer Financial Protection Bureau is considering putting three major credit bureaus under the direct control of federal examiners, subjecting them to supervision similar to that of banks.

The FTSE Eurofirst 300 was down 1 percent to 1,089.8 while the Dax fell 1.25 percent to 7,115.08 and had only three gainers, the CAC-40 was 0.49 percent lower to 3,806.85 and saw just four gainers, and the IBEX dropped 1.97 percent to 9,933.1.

Markets in the Asia-Pacific region were mixed.

The Nikkei 225 added 0.28 percent to 9,574.32 in Tokyo, while the Topix index was up 0.22 percent to 824.65 and the Mothers market gained 0.07 percent to 454.59 as carmakers saw gains and bus and truck maker Hino Motors (TYO: 7205) added 4.38 percent after it predicted it will return to profit, saying that production is back to normal as parts supplies recovered.

Toyota Motor (TYO: 7203) was up 0.62 percent while Nissan Motor (TYO: 7201) added 0.8 percent, Isuzu Motor (TYO: 7202) was 1.43 percent higher and Honda Motor (TYO: 7267) gained 2.19 percent.

Tokyo Electric Power (TYO: 9501) jumped 32 percent after the TSE cracked down on short-selling of its shares, in which borrowed shares are sold with the aim of buying them back at a later date, essentially betting that the price of the shares will fall between the time they are sold and when they are repurchased.

Other gainers in the region included the Taiex, which was up 0.03 percent to 8,831.45 in Taiwan while South Korea’s Kospi added 0.47 percent to 2.086.53.

Australia’s markets were lower, with the Sydney Ordinaries dropping 0.34 percent to 4,635.4 and the S&P/ASX200 down 0.4 percent to 4,566.8, while the Hang Seng fell 0.68 percent to 22,343.8 in Hong Kong, the Straits Times Index was 0.08 percent lower to 3,054.82 in Singapore, the Shanghai Composite was down 0.9 percent to 2,705.43 and India’s Sensex dropped 0.96 percent to 18,132.2 ahead of a decision tomorrow on interest rates from the Reserve Bank of India as Goldman Sachs warned on inflation there, saying that it expects a 25 basis-point rate hike immediately and for rates to rise by 75 basis points by the end of the year.

Equities markets in New York were lower in early afternoon trade, with the Dow Jones Industrial Average down 1.47 percent to 11,898.2 while the S&P 500 had dropped 1.62 percent to 1,267 and the Nasdaq Composite was 1.53 percent lower to 2,637.84.

Crude oil prices were lower after the New York Federal Reserve’s general economic index was reported down to minus 7.8 this month after being at 11.9 in May, indicating that manufacturing activity has contracted there, and on continuing worries about the European debt crisis.

At shortly before 1 p.m. in New York, July contracts for West Texas Intermediate crude were down $2.12 to $97.25 per barrel after being slightly higher than Tuesday’s close earlier, after the US Energy Information Administration said that crude oil stockpiles dropped by 3.4 million barrels last week, substantially more of a drawdown than had been expected, while Brent crude was last reported $3.39 lower to $115.96 on the ICE Futures Europe exchange in London.

Metals prices were mixed in New York at midday, with silver up slightly but gold and copper both lower.

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