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UK's FTSE ends 9-day winning run as banks fall
October 23, 2013 / 3:08 PM / 4 years ago

UK's FTSE ends 9-day winning run as banks fall

* FTSE 100 down 0.5 pct to end 9-day winning streak

* Banks take most points off the index

By Sudip Kar-Gupta

LONDON, Oct 23 (Reuters) - Britain’s benchmark equity index fell on Wednesday to end a 9-session winning streak, as a drop in heavyweight banking shares dragged the stock market down from 5-month highs.

Nevertheless, several traders felt any pull back would be relatively short-lived and saw the UK stock market rallying into the end of 2013.

The benchmark FTSE 100 index was down by 0.5 percent, or 36.15 points, at 6,659.51 points in late session trade.

Banks took the most points off the index.

Royal Bank of Scotland fell 2.7 percent on concerns over its exposure to a U.S. mis-selling probe on mortgage-backed bonds, and uncertainty over UK finance minister George Osborne’s examination of a possible split-up of the bailed-out lender.

“There’s an unquantifiable break-up risk with RBS,” said Rob James, senior UK equity analyst at Old Mutual Global Investors.

Cavendish Asset Management fund manager Paul Mumford added that worries about U.S. fines were also weighing on rival bank HSBC, which earlier this month was hit by a U.S. securities class action lawsuit ruling.

”“There are worries that the Americans are trying to hit the UK banks with further fines,” said Mumford.

The broader European banking sector also fell after a European Central Bank’s asset quality review demanded that banks boost their capitalisation.

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Top global bank fines link.reuters.com/qeq93v

Financial stocks’ relative weighting on European markets:

link.reuters.com/neg73v

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ARM FALLS

Chip designer ARM fell sharply for the second consecutive day, declining by 4.9 percent to make it the worst-performing FTSE 100 stock, which traders attributed to UBS’ move to downgrade ARM to “neutral” from “buy” on valuation grounds.

However, insurer RSA rose 3.8 percent in heavy volume amid renewed speculation that it could be subject to a takeover bid. RSA declined to comment on the situation.

The FTSE 100 has risen 13 percent since the start of 2013 and is just 3 percent away from a 13-year peak of 6,875.62 points reached in late May.

JN Financial trader Rick Jones felt the FTSE 100 could finish 2013 in the 6,900-7,000 point range, while Charles Stanley technical analyst Bill McNamara felt buyers would step in if the FTSE fell to the 6,625 point level, which marked a peak for the index reached in September. (additional reporting by Tricia Wright and David Brett Editing by Jeremy Gaunt)

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