Spreadex Market Update
Barclays and RBS drag FTSE lower as Osborne’s call for calm falls on deaf ears
Initially the FTSE had (relatively) held its ground, the index somewhat boosted by George Osborne’s attempts to reassure the markets. However, it seems that the impact of the Chancellor’s charms were short-lived, the FTSE almost doubling its losses to 1.5% as lunchtime approached. The pound, meanwhile, made the FTSE’s losses look positively meagre, with cable diving another 2.8% to hit a fresh 31-year low of $1.325.
In short, Osborne’s call for calm couldn’t outweigh the situation in the banking sector, which took another turn for the worse early in the European session. Following a quartet of broker downgrades Barclays, RBS and Lloyds resumed their precipitous plunge this Monday; in fact things were so bad that the former 2 banks briefly saw their trading suspended after falling by 12.5% and 14.5% respectively. Such behaviour wasn’t limited to the banking sector, with Berkeley Group and Taylor Wimpey also at points triggering automatic suspension.
A similar thing happened in the Eurozone, with the DAX and CAC seeing a quiet start turn into another wave of heavy losses, the indices falling by 1.6% and 1.5% respectively. The US sessions looks set to continue this trend, the Dow Jones facing a 140 point fall (taking it back to 17200 for the first time since mid-March) after the bell.
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