UK Banks Hit By Finance Slump

UK banks got off to a weak start yesterday, with Barclays and RBS both shedding around one percent, while Provident Financial slipped by 5.8 percent. In contrast, Micro Focus International gained 3.2 percent, and mining companies benefited from some strength in basic materials.

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shareprices.com - Tuesday, August 22, 2017

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Barclays

Overall, the UK’s leading index slipped by 5 points following a volatile day of trading, as investors tended towards being risk averse because of the bubbling tensions between the US and North Korea.

The two nations have fallen into a stalemate, and this week will see both of them engage in 10-day military exercises. Financial stocks were among the first to be sold off as the unease increased, and British Banks were particularly badly affected because of the added concerns over Brexit, and the question of whether there is likely to be a Bank of England rate hike in the near future.

Provident Financial’s shares were adversely affected by an article published in the Sunday Times, which suggested that hedge funds were betting against the company. Meanwhile, miners profited from the price of Zinc, which is up to its highest level in a decade, as investors backed both that and other commodities that are used by the steel sector in China. The health of the Chinese economy is an important metric for miners, as the country is the leading consumer of basic materials in the world, and many of the FTSE 100 listed companies deal heavily with businesses that operate in China.

 

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