FTSE slips as banking woes hit shares

The FTSE 100 Index slipped below the 5000 barrier today after another gruelling session for top-flight banking shares.

Weaker oil and mining stocks added to the pressure as the Footsie reached mid-morning 149.3 points lower at 4940.2 a drop of 3%.

Royal Bank of Scotland was the hardest hit of the financial stocks – down 14% - after its ABN Amro takeover partner Fortis was rescued in a three-way Government bail-out.

As part of the deal it emerged that Fortis must sell its stake in ABN, bought as part of the RBS-led consortium’s takeover last year. The news unsettled RBS investors, with the stock down 14% or 29.9p to 178.1p.

The nationalisation of Bradford & Bingley added to the sector’s pain, particularly as Spain’s Santander will gain a greater presence in the UK market through the acquisition of B&B’s branches and savings book.

Merger partners HBOS and Lloyds TSB were both lower, down 19p at 154.3p and 36.5p to 214.5p respectively. Even the likely bail-out of the US financial sector failed to boost shares, with analysts wary of the conditions attached to the deal.

The fragile nature of the markets was highlighted by a trading statement from interdealer broker Icap. Investor fears over second half trading caused shares to fall 16% or 61.5p to 317p, despite strong first half volumes on the back of high levels of volatility in financial markets.

Tour operator Thomas Cook was one of just a handful of risers, up 4% or 8.5p to 211.25p after posting a strong trading update. TUI Travel fared less well, falling 5.5p to 215.5p, despite echoing the positive comments of its rival.

The latest worries for the financial sector dealt another blow for housebuilding shares, with Taylor Wimpey down 5.25p at 37.75p and Barratt Developments 9p lower at 112.5p.

Camera retailer Jessops bucked the gloomy trend by announcing a deal with banks to extend existing debt facilities. Shares were 46% higher, up 1.17p at 3.73p.

More in this Section

John Lewis and Waitrose staff latest to get coronavirus bonusJohn Lewis and Waitrose staff latest to get coronavirus bonus

Viagogo reduces workforce in Limerick due to Covid-19 spreadViagogo reduces workforce in Limerick due to Covid-19 spread

Covid-19: Ryanair to take €300m hit, but still in profitCovid-19: Ryanair to take €300m hit, but still in profit

Dire US jobs numbers drive further selloff for global markets amid Covid-19 falloutDire US jobs numbers drive further selloff for global markets amid Covid-19 fallout


Lifestyle

With documentary film ‘Fantastic Fungi’ set to take the world by storm, Joe McNamee looks at the fabulous world of mushroomsDocumentary explores the magic of mushrooms

I lead a very busy life — I’m a mature student in college — and I separated from my partner but the separation was my decision. I hate myself when it beckons as it ultimately makes me fatter, it has the reverse effectDear Louise: I had my bulimia under control. But the demon has returned

This year has been particularly difficult and stressful, and I think that’s an even more important reason to make time for your health.Derval O'Rourke: Resistance is far from futile and necessary

Best-selling author Faith Hogan is keeping the faith during the lockdown, thanks to her Moy Valley haven in Ballina, Co Mayo.Shape I'm in: Keeping the Faith during lockdown

More From The Irish Examiner