Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Financial stocks drag FTSE into the red

Financial stocks drag FTSE into the red

Financial stocks have dragged the FTSE 100 lower in the afternoon's trading, despite investors' shrugging off Lloyds' £218 million fine over Libor rigging.

Shares in Lloyds (LLOY) were relatively unaffected by the news, which had been priced in my investors, trading flat at 74.8p, having fallen around 1% in the immediate aftermath of the announcement. You can read more about the Lloyds fine here.

However, the news acted as a further drag on Royal Bank of Scotland (RBS), already one of the big fallers of the day, as it gave up some of the big gains made on Friday on the announcement of surprise profits. RBS fell 3.2% to 217.5p, while Barclays (BARC) was down 0.1% at 217.8p.

Aberdeen Asset Management (ADN) also continued to shed value, trading 5.5% lower at 434.1, after announcing in its third quarter results that clients had withdrawn £8.8 billion from its funds.

The FTSE was trading 10 points, or 0.1% lower, at 6,782 points.  

Reckitt props up FTSE as Russia tensions weigh

11:20 A jump in the share price of consumer group Reckitt Benckiser (RB) has helped to prop up the FTSE 100 as investor unease over tensions between Russia and the West persists.

Reckitt was the biggest riser on the index, adding 160p, or 3.2%, to £52.29 as it announced plans to spin off its heroin-addiction treatment as sales slide due to competition from generic versions of Suboxone.

The group announced a 4% rise in first-half sales, excluding Suboxone, whose sales fell 8%, and said it was on course for revenue growth of around 4-5% over the year.

‘We read the outlook statement as more positive and confident in guiding to on-track sales growth of 4-5% and “continuing margin progression in the second half” driven by planned efficiency programmes,’ said analysts at Jefferies.

British Sky Broadcasting (BSY) pared some of the losses made on Friday as it announced a deal to buy Italian and German pay-TV operators from 21st Century Fox. The broadcaster rose 2% to 892p.

Aberdeen Asset Management (ADN) was the biggest faller on the FTSE 100 as client withdrawals hit the fund group’s third-quarter trading.

Aberdeen fell 3.2% to 444.8p as it announced clients had withdrawn £8.8 billion, prompting a 0.6% drop in assets to £322.5 billion and offsetting improved market performance.

‘Management had previously detailed a single low margin Sovereign Wealth Fund redemption but not quantified it,’ said analysts at Barclays.

‘Today this is confirmed at £4 billion size from Asia pacific and Global Equities. Even stripping this out, £4.8 billion of group outflows is still weaker than our forecast.’

Royal Bank of Scotland (RBS) also traded lower, down 2.7% at 354.4p, following a stellar surge on Friday on surprise profits, while ‘small cap’ stock Mothercare (MTC) was a big faller after US chain Destination Maternity announced it would not be returning with a further bid for the mother and baby products retailer. Mothercare had twice rejected takeover bids from Destination. It fell 6.5% to 241.5p in the morning’s trading.

Fellow small cap stock Trinity Mirror (TNI) rose 11.3% to 198.4p after announcing full-year results were set to come in ahead of investor expectations and reinstating its dividend, guiding 3p for 2014 and 5p from 2015 onwards.

Investors trod with caution against the backdrop of the ongoing tensions between Russia and the West. Reports that Europe Union leaders could hit Russia with more stringent sanctions than previously announced has depressed sentiment.

‘The key question remains whether these new measures, if agreed, will be enough to give president Putin any pause,’ said Michael Hewson, chief market analyst at CMC Markets UK.

‘This seems doubtful given that they won’t affect existing deals like the French deal to supply military hardware to the Russians, as once again national self-interest prevents a co-ordinated effective response to Russia’s actions.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: 'new normal' now is as dangerous as when it was applied to tech

Profile: 'new normal' now is as dangerous as when it was applied to tech

7IM's CIO Chris Darbyshire says he has been re-energised by his new role, but has little time for 'new normal' doom-mongers

Wealth Manager on Twitter