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LONDON (Alliance News) - UK stock indices are trading mostly lower midday Friday, with banks amongst FTSE 100 decliners following reports that the Brazil competition authorities are launching an investigation into alleged manipulation of currency rates.
Several media outlets reported on Thursday that competition authorities in Brazil are investigating fifteen of the biggest banks in the world over allegations that they colluded to influence benchmark currency rates in the South American country. Cade, the Brazilian competition authority, alleged that banks' activity deterred competitors from the market for several years from 2007, the reports said.
Standard Chartered trades down 2.0%, Royal Bank of Scotland Group is down 2.0%, Barclays is down 1.5% and HSBC Holdings is down 1.2%.
In addition, RBS could face a penalty of as much as USD13 billion depending on the outcome of a US mortgage securities lawsuit, Bloomberg News reported on Thursday. According to the report, the US Federal Housing Finance Agency, which is suing on behalf of Fannie Mae and Freddie Mac, estimated that amount in a court filing in a related case.
The FTSE 100 trades down 0.4% at 6,604.78, and the FTSE 250 is down 0.3% at 17.638.72. The AIM All-Share, however, is up 0.6% at 765.74.
In Europe, the CAC 40 in Paris is down 0.4%, and the DAX 30 in Frankfurt is flat. US markets are closed Friday for independence day celebrations.
The pound rose against other major currencies after UK Markit/Chartered Institute of Procurement & Supply services purchasing managers' index came in ahead of expectations in June. The index rose to 58.5 in June from a five-month low of 56.5 in May, surpassing expectations for a rise to 57.5. The data suggests that the second quarter of 2015 was the strongest on average since the third quarter of 2014. A score above 50.0 marks an expansion.
At midday, the pound trades the dollar at USD1.5631, and the euro at EUR1.4074.
Investors also are looking ahead to Sunday's referendum in Greece on its bailout conditions. Greek Prime Minister Alexis Tsipras on Thursday urged Greeks to preserve "national unity" in the face of "temporary" difficulties. Tsipras has urged Greeks to opt for "no" on Sunday when they vote in a referendum he called on whether the country should accept reforms demanded by its creditors.
Opinion polls ahead of the referendum suggest that Greece is divided right down the middle. A poll commissioned by Bloomberg News by the University of Macedonia Research Institute of Applied Social and Economic Studies showed that of the 1,042 people surveyed, 43% intend to vote "no" to reject the austerity demanded by creditors in exchange for financial aid; 42.5% back a "yes" to accept the conditions.
Other polls also suggest a close race. According to a survey by ALCO published Friday in the Ethnos newspaper, the "yes" camp is slightly ahead with 44.8%, compared with 43.4% for the "no" camp. A further 11.8% are undecided.
Greece's creditors said they will not engage in negotiations for a new bailout package with Greece's leaders until after the referendum.
Elsewhere on the London Stock Exchange, British Land Co is up 0.9% following its analyst and investor day on Thursday. Panmure Gordon says it believes the property developer's strategy is revealing opportunities in the rapidly changing consumer shopping environment.
Rolls-Royce Holdings is down 1.7% at 861.685 pence after Deutsche Bank cut its price target on the aerospace and engineering company to 610.00 pence from 645.00p reiterating its Sell rating. The bank has concerns about the Roll-Royce's ability to deliver earnings growth in 2016.
Auto Trader Group leads the midcap gainers, up 4.5%, after Exane BNP initiated the digital car retailer at Outperform. Meanwhile, shares of online property portal companies Rightmove, up 1.0%, and Zoopla Property Group, down 1.6%, are seeing mixed fortunes after notes from Investec. The broker upgraded Rightmove to Hold from Sell on the back of its market-leading position and robust trading, but initiated coverage of Zoopla at Sell saying the launch of OnTheMarket has exposed the investment case for the company.
In the AIM All-Share index, Optimal Payments is up 15% after it said it expects its EUR1.1 billion takeover of payments rival Skrill to win approval from UK regulators by the end of July. The approval will enable it to complete the deal, transfer to the London Stock Exchange's Main Market, and seek a place in the FTSE 250 index.
Drinks company Distil, up 12%, said its current financial year has started well, with sales and volumes higher year-on-year. The company, which owns the Blackwoods Gin and Vodka and RedLeg Spiced Rum brands, said it has been boosted by the increased exposure of its brands across distribution channels in the UK and overseas.
Ubisense Group is off 14% after it issued a warning on its revenue for the full year, saying it has been hit by more contract delays in the first half and said it will restructure its operations to cut costs. The location intelligence services company said that in addition to an anticipated fall in lower-margin Services division revenue and the delays of two contracts into the second half of the year, it has now seen further delays on certain contracts, meaning revenue in its Solutions arm in the first half will be "some way short" of the first half of 2014.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
Copyright 2015 Alliance News Limited. All Rights Reserved.
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JPMorgan cuts at least six investment banking jobs in Hong Kong, sources say
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