FTSE Ends Quarter on a Weak Note

The FTSE 100 has enjoyed a comparatively strong quarter, especially when you consider the difficulties that the industry has had over the last few months. The UK’s leading index ended the quarter, however, on a bit of a down note - shedding 1.1 percent during Friday’s early trade.

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shareprices.com - Saturday, October 01, 2016

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Banks were some of the hardest hit, as worries about the stability of Deutsche Bank continued to intensify. Meanwhile, the outsourcing company Capita also suffered, after being hit by a broker downgrade. The company issued a profit warning on Thursday, and saw brokers slash their price targets for the shares immediately. However some brokers have since improved their rating on the stock after seeing it take a significant price hit on Thursday and Friday.

Banks across Europe struggled, because of fears that if something could happen to a bank as big as Deutsche Bank, there would be a similar risk elsewhere in the system. The negative mood in the market can be managed in the short term, but investors are anxiously watching the bank to see what will happen next and whether the German government is really willing to allow the bank to fall into serious difficulties.

Meanwhile, in the FTSE 350, a similar picture played out, with banks being some of the words performers. RBS has unveiled some sweeping structural reforms to its business, including separating its retail operations from the riskier parts of its business in a bid to comply with some forthcoming UK banking regulations.

 

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