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Glance-FTSE ends 0.3% lower as Lloyds lead banks slide
Fri, 13th Feb 2009 17:33
By Dominic Lau
LONDON, Feb 13 (Reuters) - Britain's leading share index
ended down 0.3 percent on Friday, led by banks dragged down by
Lloyds Banking Group's plunge on a worse-than-expected
loss at its HBOS unit, while oil stocks offered some support.
The FTSE 100 closed 12.65 points lower at 4,189.59,
after trading as high as 4,291.57. The index was down 2.4
percent this week and is down 5.5 percent for the year after
falling more than 31 percent last year.
Lloyds slumped more than 32 percent after the lender said
HBOS made a hefty loss last year due to bigger-than-expected bad
loans.
'This merger is turning out to be the merger from hell for
Lloyds,' said Martin Slaney, head of derivatives at GFT Global
Markets.
More than 216 million Lloyds shares changed hands, compared
with a daily average of 65.9 million in the past 30 trading
days.
'We have seen this huge loss from HBOS, which was not
expected at all by the market, considering only a few weeks ago
they were expecting a loss of half of what they had announced,'
said Angus Campbell, head of sales at Capital Spreads.
'It's terrible for Lloyds shareholders, terrible for HBOS
shareholders, terrible for the banking sector as a whole.'
The announcement dragged other banks lower, giving up their
earlier gains on news that the U.S. government was hammering out
a programme to subsidise mortgages for homeowners before they
fall into loan arrears.
Royal Bank of Scotland sank 9.2 percent, Barclays lost 4.3 percent and HSBC fell 0.7 percent.
In the financial sector, Legal & General sagged 9.5
percent. Deutsche Bank, which cut its price target on the
insurer, said that 'increased default assumptions on corporate
bonds would prove most damaging for L&G, whose current
assumption is out of line with UK peers, and where its exposure
is above average'.
The U.S. Congress was expected to pass a $789 billion
economic stimulus package later in the day aimed at unleashing
large spending and tax cuts to help yank the economy out of a
14-month recession.
A survey showed U.S. consumers' confidence fell to its
lowest in three months in February as sentiment grew
increasingly gloomy over an economic downturn that most expected
to last five more years.
OILS TIP BALANCE
Oil producers added the most points to the index as crude
prices firmed. Royal Dutch Shell, BG Group and Tullow Oil were up 1.7 to 4.7 percent.
Miners also rose, with BHP Billiton up 1.6 percent,
Xstrata gaining 4.5 percent and Kazakhmys rising
4.2 percent.
The London Stock Exchange advanced 3.8 percent after
it said Xavier Rolet, an equities
trading veteran who ran Lehman
Brothers in France, has been appointed as the bourse's new chief
executive.
Home improvement retail group Kingfisher added 3.7
percent after UBS raised it to 'buy' from 'neutral' and upped
its price target. This helped peer Home Retail, which
added 3.7 percent.
Financial markets will look to the meeting of Group of Seven
(G7) financial leaders in Rome on Friday and Saturday for
further action to arrest the worsening economic crisis,
triggered by a meltdown in risky U.S. subprime mortgages.
'Considering what's gone in the past recently with
politicians trying to rectify the situation with the economic
crisis and the financial markets, it hasn't boded that well.
Financial markets aren't expecting too much to come out of
that,' Campbell of Capital Spreads said.
(Additional reporting by Simon Falush; editing by Karne Foster)
Keywords: MARKETS BRITAIN STOCKS
(dominic.lau@reuters.com; +44 20 7542 5440; Reuters Messaging: dominic.lau.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, Feb 13 (Reuters) - Britain's leading share index
ended down 0.3 percent on Friday, led by banks dragged down by
Lloyds Banking Group's plunge on a worse-than-expected
loss at its HBOS unit, while oil stocks offered some support.
The FTSE 100 closed 12.65 points lower at 4,189.59,
after trading as high as 4,291.57. The index was down 2.4
percent this week and is down 5.5 percent for the year after
falling more than 31 percent last year.
Lloyds slumped more than 32 percent after the lender said
HBOS made a hefty loss last year due to bigger-than-expected bad
loans.
'This merger is turning out to be the merger from hell for
Lloyds,' said Martin Slaney, head of derivatives at GFT Global
Markets.
More than 216 million Lloyds shares changed hands, compared
with a daily average of 65.9 million in the past 30 trading
days.
'We have seen this huge loss from HBOS, which was not
expected at all by the market, considering only a few weeks ago
they were expecting a loss of half of what they had announced,'
said Angus Campbell, head of sales at Capital Spreads.
'It's terrible for Lloyds shareholders, terrible for HBOS
shareholders, terrible for the banking sector as a whole.'
The announcement dragged other banks lower, giving up their
earlier gains on news that the U.S. government was hammering out
a programme to subsidise mortgages for homeowners before they
fall into loan arrears.
Royal Bank of Scotland sank 9.2 percent, Barclays lost 4.3 percent and HSBC fell 0.7 percent.
In the financial sector, Legal & General sagged 9.5
percent. Deutsche Bank, which cut its price target on the
insurer, said that 'increased default assumptions on corporate
bonds would prove most damaging for L&G, whose current
assumption is out of line with UK peers, and where its exposure
is above average'.
The U.S. Congress was expected to pass a $789 billion
economic stimulus package later in the day aimed at unleashing
large spending and tax cuts to help yank the economy out of a
14-month recession.
A survey showed U.S. consumers' confidence fell to its
lowest in three months in February as sentiment grew
increasingly gloomy over an economic downturn that most expected
to last five more years.
OILS TIP BALANCE
Oil producers added the most points to the index as crude
prices firmed. Royal Dutch Shell, BG Group and Tullow Oil were up 1.7 to 4.7 percent.
Miners also rose, with BHP Billiton up 1.6 percent,
Xstrata gaining 4.5 percent and Kazakhmys rising
4.2 percent.
The London Stock Exchange advanced 3.8 percent after
it said Xavier Rolet, an equities
Brothers in France, has been appointed as the bourse's new chief
executive.
Home improvement retail group Kingfisher added 3.7
percent after UBS raised it to 'buy' from 'neutral' and upped
its price target. This helped peer Home Retail, which
added 3.7 percent.
Financial markets will look to the meeting of Group of Seven
(G7) financial leaders in Rome on Friday and Saturday for
further action to arrest the worsening economic crisis,
triggered by a meltdown in risky U.S. subprime mortgages.
'Considering what's gone in the past recently with
politicians trying to rectify the situation with the economic
crisis and the financial markets, it hasn't boded that well.
Financial markets aren't expecting too much to come out of
that,' Campbell of Capital Spreads said.
(Additional reporting by Simon Falush; editing by Karne Foster)
Keywords: MARKETS BRITAIN STOCKS
(dominic.lau@reuters.com; +44 20 7542 5440; Reuters Messaging: dominic.lau.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
