Connect with us

Company

Banks and oil companies weigh on FTSE 100 as investors pause ahead of U.S. holiday

Published

on


Stocks in London fell on Wednesday, keeping in step with losses for global markets, with major oil companies and bank stocks leading the way lower. Investors were also absorbing new spending plans by U.K. Chancellor Rishi Sunak to help the country tackle economic fallout from the coronavirus pandemic.

The FTSE 100 index fell 0.6% to 6,393.33. Up 14% in November so far, that gain would mark the best monthly return for the index since January 1989. Investors have been cheered by a string of positive COVID-19 vaccine news and a rally for oil prices, up 26% in the same period.

But energy companies, such as Royal Dutch Shell
RDSA,
-1.92%

and BP
BP,
-2.63%

dropped around 2% each on Wednesday, weighing on the FTSE 100. Oil’s losses were in step with a pullback seen across markets after the Dow industrials hit 30,000 for the first time on Tuesday.

U.S. markets will close on Thursday for the Thanksgiving Day holiday, reopening on Friday for a shortened session.

The pound was flat at $1.3360, and has gained about 0.3% on the week and 0.5% for the month of November.

Sunak’s spending review, announced on Wednesday, confirmed another £38 billion ($50 billion) for public services to fight the COVID-19 pandemic, and £55 billion for departments to respond in 2021.

“Rishi Sunak’s spending review was a sobering assessment of not only the challenges facing the U.K. economy, but also the enormous economic damage created by the pandemic and the numerous lockdowns around the country, with the budget deficit for 2020 expected to come in at £394 billion,” said Michael Hewson, chief market analyst at CMC Markets, in a note to clients.

Read: Bank of England chief contradicts Chancellor Rishi Sunak by warning a ‘no-deal’ Brexit would hurt economy more than COVID

Banks were under pressure from the start of trading with Lloyds Banking
LLOY,
-3.46%

and Barclays
BCS,
-4.59%

dropping more than 3% each. “That decline comes off the back of a particularly fruitful period for the banks, with vaccine announcements from Pfizer
PFE,
-0.79%
,
Moderna
MRNA,
+8.04%

and AstraZeneca
AZN,
-2.50%

helping to lessen the risk of an even more drawn-out economic collapse,” said Joshua Mahony, senior market analyst at IG, in a note to clients.

“Fears that a wave of bankruptcies would cripple the banks has failed to arrive thus far, with Rishi Sunak’s spending spree helping to stave off many of the worst economic outcomes from such a period of economic contraction. However, while the economic picture doesn’t look too bad for now, there is a risk that banks will suffer in the event we do see a sharp rise in job losses come March,” said Mahony.

Banks were in the spotlight earlier after Yves Mersch, vice-chair of the European Central Bank’s supervisory board, told the Financial Times that eurozone banks may be allowed to resume dividend payouts in 2021 if their balance sheets can weather the continuing pandemic storm.

Banks were ordered to halt dividends and share buybacks as the COVID-19 pandemic began sweeping through Europe in March, and the ECB is expected to reach a decision on those payouts by year-end.



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Company

These money and investing tips are timed for a bull market that looks short on time

Published

on

By


Don’t miss these top money and investing features:

These money and investing stories, popular with MarketWatch readers over the past week, can help you prepare your portfolio as stock buyers become more skittish and financial markets grapple with a less-friendly Federal Reserve — which savvy investors know not to fight.

Sign up here to get MarketWatch’s best mutual funds and ETF stories emailed to you weekly!

INVESTING NEWS & TRENDS
Odds favor the Dow being higher at the end of 2021 and 125 years of history supports this

Second half of the year tends to be strong for U.S. stocks.
Odds favor the Dow being higher at the end of 2021 and 125 years of history supports this

Why a crash in meme stocks AMC and GameStop looks more likely now

Heavy insider selling is a warning sign that a stock’s price is inflated.
Why a crash in meme stocks AMC and GameStop looks more likely now

What lumber and gold prices tell us about the stock market’s next move

Commodities have an effect on stocks but the one to watch is platinum.
What lumber and gold prices tell us about the stock market’s next move

5 smart ways to shift your investments as the Fed gets ready for a big move

Be careful with meme stocks and bitcoin.
5 smart ways to shift your investments as the Fed gets ready for a big move

The real culprit for the selloff in the stock market? It wasn’t the Fed

The Federal Reserve was just the spark; the tinder was the excessive bullishness of market-timing traders
The real culprit for the selloff in the stock market? It wasn’t the Fed

Buybacks may prop stock market rattled after Fed meeting

‘It’s a way to look like they’re earning more than they actually are,’ says one analyst about companies doing buybacks.
Buybacks may prop stock market rattled after Fed meeting

Buy these 6 types of stocks next as Big Tech falters and inflation falls, says Swiss bank UBS

The group at the Swiss bank identifies two major trends ahead.
Buy these 6 types of stocks next as Big Tech falters and inflation falls, says Swiss bank UBS

To Roth or not to Roth? Part II

Further discussion of research that challenges the conventional wisdom.
To Roth or not to Roth? Part II

If the SEC OKs bitcoin ETFs, it would be encouraging the most obvious speculative bubble in modern times

Crypto doesn’t belong in your IRA or 401(k).
If the SEC OKs bitcoin ETFs, it would be encouraging the most obvious speculative bubble in modern times

The road to regulating crypto

SEC Commissioner Hester Peirce on how the U.S. government can effectively approach regulating bitcoin and other cryptocurrencies. The views expressed by Peirce are her own views, not necessarily those of the SEC or her fellow commissioners.
The road to regulating crypto

What are the Dow, S&P 500, and Nasdaq? | How to Invest

The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite are indexes that measure the performance of the stock market. Here’s how each is used and what insights they provide for investors.
What are the Dow, S&P 500, and Nasdaq? | How to Invest

Why women investors are like Warren Buffett

Rupal Bhansali, chief investment officer of Ariel Investments, explains at the WSJ Women In Series why women investors trade more conservatively and how that is a good thing.
Why women investors are like Warren Buffett



Source link

Continue Reading

Company

These money and investing tips can help you with stock and bond strategies to whip inflation

Published

on

By


Don’t miss these top money and investing features:

These money and investing stories, popular with MarketWatch readers over the past week, can help you prepare your portfolio for a period of higher inflation — transitory or not.

Sign up here to get MarketWatch’s best mutual funds and ETF stories emailed to you weekly!



Source link

Continue Reading

Company

These money and investing tips can shine some light through the stock market’s ‘June gloom’

Published

on

By


Don’t miss these top money and investing features:

These money and investing stories, popular with MarketWatch readers over the past week, can help your decision-making if the market outlook becomes cloudier and momentum starts to fade — even as the outlook for the post-pandemic economy gets clearer.

Sign up here to get MarketWatch’s best mutual funds and ETF stories emailed to you weekly!



Source link

Continue Reading

Trending