Banks under pressure while market also hit by Chinese growth figures
Banks are leading the fallers as markets edge lower, following a surprise loss reported by Deutsche Bank.
Royal Bank of Scotland has dropped 7.1p to 356.6p while Barclays is down 4.1p at 284.5p, Lloyds Banking Group is 0.34p lower at 83.18p and HSBC has lost 2.6p to 675.1p. Ishaq Siddiqi, market strategist at ETX Capital, said:
Deutsche Bank this morning warned on profits; nasty set of numbers which have geared investors here in Europe for what could be an ugly earnings season for European banks. Deutsche Bank blames slowdown in debt markets, deterioration in fixed income business and litigation expenses – at the same time, the bank continues to restructure itself, dragging on profitability until the process ends.
Shares in Barclays and Royal Bank of Scotland are both lower on the back of the pronounced deterioration of fixed income trading divisions for investment banks; both have bulky fixed income trading operations which are not immune to the trend noted across the industry.
The banking declines have helped push the FTSE 100 4.03 points lower to 6825.27, with flat year on year Chinese GDP growth also hitting sentiment. With US markets closed for Martin Luther King Day there will be no guidance from Wall Street later.
Royal Dutch Shell is still on the slide after Friday's profit warning, not helped by a dip in crude prices due to the Chinese data and reports that a nuclear deal with Iran could boost global oil supply.
Shell, whose A shares are down 19.5p at £21.55, also announced the $1.14bn sale of stakes in a gas project in Western Australia.
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