Heightened volatility continued in the banking sector today with Barclays and Royal Bank of Scotland shares see-sawing in another tough session for the sector.
RBS swung between positive and negative territory, while Barclays remained in the red, although Lloyds Banking Group held firm in positive territory at the head of the risers board.
Heavy falls in early trading on Wall Street saw the wider FTSE 100 Index close down 7.7 points at 4052.2.
The Dow Jones Industrial Average plunged 3% after figures revealed the number of new unemployment claims jumped more than expected last week, to a seasonally adjusted 589,000 – well above economists forecasts of 540,000.
In London, Barclays was the biggest faller, down 10% or 6.9p at 59.2p, having earlier dipped only 0.9p, while RBS closed down 0.3p at 12.2p, having risen as much as 16% at one stage.
Barclays was suffering amid speculation that any further capital raising initiative could trigger a clause that would hand control of the bank to its Middle East investors.
Among other banking stocks, HSBC rose 11.5p to 527p and fellow Asian-facing bank Standard Chartered lifted 4%, or 34p to 800p.
The biggest corporate news of the session came from telecoms giant BT Group after it warned of a £340 million one-off charge from its under-performing Global Services division.
Shares slumped 9% or 11.2p to 111.8p, as the stock returned to the 20-year low seen in October after a previous profits warning from Global Services.
Supermarket group Morrisons was also lower despite posting healthy Christmas trading figures, as analysts turned their attention to uncertain trading prospects in 2009. Shares were off 4% or 11.5p at 252.75p, while rival Tesco was down 1.4p at 349.9p and Sainsbury’s fell 10.75p to 300.5p.
Other retailers were also seeing falls, with Next down 4p at 1098p and Argos parent Home Retail Group off 1p at 201.25p.
Low-cost airline easyJet made progress in the FTSE 250 Index after it reported better-than-expected passenger numbers for the first quarter. Shares jumped 12% or 31.75p to 286.75p as easyJet’s revenues lifted 32% to £550 million and it said it had captured more business from outside of the UK.
The carrier’s rise was overtaken by pub firms Enterprise Inns and Punch Taverns after a trading update from Enterprise calmed nerves in the sector.
The better-than-expected statement lifted Enterprise by 19% or 6p to 37.75p, while Punch gained 21% or 7p to 9.25p.
Fellow pub group Mitchells & Butlers was up 9.75p at 169.75p after Bank of America raised its rating on the stock, but Greene King was lower after the same note lowered the bank’s price target. The brewer and pubs chain was off 25.75p at 355.25p, a fall of 7%.
The biggest Footsie risers were Lloyds Banking Group ahead 4p at 49.1p, Amlin ahead 16.75p at 394p, Standard Chartered up 34p at 800p and Friends Provident up 3p at 74.3p.
The biggest Footsie fallers were Barclays down 6.9p at 59.2p, BT Group off 11.2p at 111.8p, Man Group down 14p at 206.75p and Aviva off 15p at 283p.