Bank sector aversion cancels-out positive individual stock earnings
The FTSE 100 is being pulled in both directions this morning with a raft of positive earnings reports and upgrades for the likes of Rolls-Royce Group (LON:RR) being restricted by a sell-off of bank stock as investors maintain negative sentiment about the stability of the global economic recovery.
Rob Hull
shareprices.com - Wednesday, September 29, 2010
At 09:40GMT, the blue-chip index is down by 0.2 per cent with a loss of 11 points to drop to 5,567.08.
Wednesday’s anchor stocks are predominantly banks with global economy concerns still weighing on investor minds. The risk-asset sell-off has been pushed further this morning after UBS said that any gains on European markets would falter this morning as sovereign debt grew with Portugal, Spain and, more notably for UK stocks, Ireland centre of attention.
With Moody, who already downgraded Anglo Irish Bank’s debt on Monday, set to make a decision on Spain’s debt rating later in the week, the banking sector looks set to take yet another big hit. And London investors are keeping an eye on Standard & Poor’s which is expected to slash its credit rating in Ireland, too.
With more downbeat ratings due in the near future, banks are strictly out of favour today with Royal Bank of Scotland (LON:RBS) heading the sell-off, shedding 2.1 per cent of its share price.
HSBC Holdings (LON:HSBA) is 1.9 per cent down, Standard Chartered (LON:STAN) is posting share price declines in the region of 1.6 per cent and both Lloyds Banking Group (LON:LLOY) and Barclays (LON:BARC) are over one per cent down.
The biggest individual decliner of the opening hours on Wednesday is miner Vedanta Resources (LON:VED) which has shed 4.6 per cent of its share price after its Sterlite Industries arm was ordered to close its Tuticor copper smelter in India after a court decision.
The FTSE 100 fallers charts was also hit with a bout of ex-dividend groups with Centrica (LON:CNA), Immarsat (LON:ISAT) and Morrison (Wm) Supermarkets (LON:MRW) all losing their payout attractions.
Despite banks being down, the energy sector and a few individual stocks are pulling in the opposite direction.
Crude prices rallied after falls in recent sessions, pushing the likes of BP (LON:BP) and Essar Energy (LON:ESSR) higher by two and 1.4 per cent respectively.
The top performing stock so far this morning is Rolls-Royce Group, up over four per cent, after receiving an upgrade from Morgan Stanley.
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