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Banks lead FTSE 100 lower | |
(about 5 hours later) | |
(Close): An early rally in London's leading shares soon fizzled out, with attention focused on banking stocks following the publication of Europe-wide stress tests on Sunday. | |
Shares in Lloyds Banking Group fell 1.8% after the European Banking Authority's results showed the bank only narrowly passed the test. | |
Barclays was down 2%, RBS fell 1.4%, while HSBC ended the day 1.3% lower. | |
Overall, the FTSE 100 index was down 25.27 points, or 0.4%, at 6,363.46. | |
"The news will weaken Lloyds' position as it negotiates with the FCA about restarting dividend payments, and the share price fall reflects a hasty recalculation among investors about the chances of an income stream from the bank in the future," said Chris Beauchamp, market analyst at IG. | "The news will weaken Lloyds' position as it negotiates with the FCA about restarting dividend payments, and the share price fall reflects a hasty recalculation among investors about the chances of an income stream from the bank in the future," said Chris Beauchamp, market analyst at IG. |
The biggest reaction to the stress tests was seen in Italy, where shares in Monte dei Paschi sank more than 15% and were then suspended. The stress test revealed it had a capital shortfall of €2.1bn (£1.65bn, $2.6bn). | The biggest reaction to the stress tests was seen in Italy, where shares in Monte dei Paschi sank more than 15% and were then suspended. The stress test revealed it had a capital shortfall of €2.1bn (£1.65bn, $2.6bn). |
Travel shares were having a better day as oil prices fell and worries about the impact of the Ebola virus eased. | Travel shares were having a better day as oil prices fell and worries about the impact of the Ebola virus eased. |
Travel company TUI Travel rose 2.5% and Intercontinental Hotels Group climbed 2.3%. | |
The price of Brent crude oil dipped after Goldman Sachs cut its oil price forecasts. | The price of Brent crude oil dipped after Goldman Sachs cut its oil price forecasts. |
Goldman now expects Brent to be about $85 a barrel in the first quarter of 2015, compared with its previous forecast of $100. | Goldman now expects Brent to be about $85 a barrel in the first quarter of 2015, compared with its previous forecast of $100. |
It has also cut its forecast for the price of US crude to $75 a barrel from $90. | It has also cut its forecast for the price of US crude to $75 a barrel from $90. |
Brent crude for December delivery fell 81 cents to $85.42 a barrel, while US light crude was down $1.38 at $80.68 a barrel. | |
On the currency markets, the pound rose four-tenths of a cent against the dollar to $1.6129 and was almost unchanged against the euro at €1.2687. |