Banking sector suffers falls after Barclays news

News of a planned sell-off by one of Barclays’ biggest Middle Eastern investors saw hefty share falls across the banking sector today.

Barclays shares slumped more than 14% after Abu Dhabi royal family-backed International Petroleum Investment Corp (IPIC) said it intends to dispose of the equivalent of 1.3 billion shares.

Profit taking after yesterday’s 2% surge also left the wider FTSE 100 Index in the red, down 54.9 points at 4451 by mid-morning.

Barclays was hit by IPIC’s decision as investors saw the move as a sign to sell following a recent strong run for the stock.

Other banks were dragged lower, including Lloyds Banking Group down 3.4p at 69.1p and HSBC off 12.5p at 539.5p.

While financial shares dominated the fallers board, retailers were in the black after a better-than-expected result from B&Q owner Kingfisher.

The DIY group leapt to the top of the risers board with an almost 6% rise after it said retail profits for the UK arm of the chain rose to £58m (€67m) in the 13 weeks to May 2, up from £29m (€34.5m) in the same period last year.

Shares rose 110.4p to 194.2p despite the firm’s warnings that it was more cautious for the remainder of the year.

Argos and Homebase parent Home Retail Group was boosted 9.25p to 251.25p by Kingfisher’s encouraging news from the battered DIY sector, while supermarket Sainsbury’s also saw gains – up 5.25p at 314.25p.