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London stocks fall as fears of banking crisis linger

Tan KW
Publish date: Fri, 24 Mar 2023, 06:13 PM
Tan KW
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BENGALURU London stocks fell on Friday (March 24), dragged by energy shares that tracked oil prices lower, while banks extended declines at the end of a turbulent week, as fears of a global banking crisis lingered.

The blue-chip FTSE 100 fell 1.4%, extending losses after a near 1% drop on Thursday.

British banks lost 2.7%, falling for a third straight session, joining their European peers in Friday's slide.

The markets are nervous about the recurrence of further bank failures, said Edward Stanford, the head of European equity strategy at HSBC, adding that they do not share those worries.

"The financial sector has stabilised in performance over the last week. We have had banks rescued by other banks, and I think what we're getting is kind of aftershocks and concerns."

Barclays fell 3.4% after HSBC reduced its target price for the stock.

Energy major Shell fell 2.5%, while BP was down 2.5% as well, dragging the broader energy sector down 2.5%, as oil prices extended losses on worries about a potential oversupply.

Despite Friday's losses, the FTSE 100 was up nearly 1% for the week and on track to post its best weekly performance in five, helped by a brief mid-week relief rally in banking stocks and rising commodity prices.

The more domestically focused FTSE 250 Mid-Cap Index fell 1%, with UK-listed shares in TUI AG down 6.0%, after the German tourism group announced a capital increase.

Smiths Group rose 1.1%, as the industrial technology company raised its annual forecast after first-half profit climbed 27%.

The "flash" or preliminary reading of the S&P Global/CIPS UK composite purchasing managers index came in at 52.2 in March, down from 53.1 in February, but above the 50 threshold for growth. Economists had forecast a reading of 52.8.

The reading comes a day after the Bank of England's 25-basis-point interest rate hike.

Separately, data showed British retail sales rebounded by 1.2% in February versus expectations of a rise of 0.2%.


  - Reuters


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