Bank losses send FTSE 100 dipping into the red

The FTSE 100 was down 0.1% at 7,033.75 as financial, consumer goods and basic material shares traded in the red. But oil and gas and industrial shares notched gains. The index on Wednesday shed less than 0.1% to end at 7,041.42.

Bank shares on Thursday were lower as investors waited to hear whether the Italian government will nationalise Banca Monte dei Paschi di Siena, the world’s oldest lender.

The bank, which is under a heavy debt load, has been trying to raise €5 billion ($ 5.22 billion) in new private capital. But those efforts appear to have failed. “It’s only managed [to raise] €2 billion so far, with … key Qatari investors choosing not to invest a €1 billion chunk,” said Connor Campbell, financial analyst at Spreadex, in a note.

“This news has begun to drag on the rest of the European banking sector, with the likes of Deutsche Bank, Barclays and Lloyds all dipping their toes into the red,” he said.

In London, Barclays fell 0.6%, while the Royal Bank of Scotland and Lloyds Banking Group each lost 0.4%. HSBC was down 0.3%, and Standard Chartered declined 0.7%.

The Stoxx Europe 600 Bank Index shed 0.9%, with Germany’s Deutsche Bank off 0.2%.

Meanwhile, Banca Monte dei Paschi shares may be in for a volatile session. They fell by more than 6% when they opened after a delay, then swung up by more than 3%. They recently traded up by 1.6%.

Back on the FTSE 100, advancers were led by a 1.8% rise in testing-services company Intertek Group.

At the bottom of the index were shares of miner Antofagasta, down 1.7% as copper prices slumped nearly 1%.

The pound was buying $ 1.2345, down from $ 1.2360 late Wednesday in New York.

This article was first published by MarketWatch

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