Markets: Bank shares wobble as Bob Diamond talks

By DOMINIC JEFF
Published on 04/07/2012 20:06

The London market struggled for direction yesterday as traders held on to recent gains with one eye on Bob Diamond’s testimony to MPs.

Brenda Kelly senior strategist at CMC Markets, said: “In what was essentially a very lacklustre day on European markets, banks and energy stocks took a breather after Tuesday’s gains and bourses generally consolidated amid wafer-thin trading volumes.”

The FTSE 100 fell 3.3 points to close at 5,684.5 as banking shares weighed on the index amid continuing fears that more lenders will be embroiled in the rate-rigging scandal.

With Diamond’s marathon testimony still going on as the London market shut, Lloyds was down 0.2p at 31.7p, Royal Bank of Scotland was off 2p at 214.5p and HSBC was 2.7p lower at 567.6p.

Barclays was down 1.1p at 166p after Oriel Securities cut its target price, saying it expects Barclays Capital to be wound down. The beleaguered lender’s shares are significantly lower than the 196p at which they opened last Thursday before the bank saw around £3 billion wiped from its market value as the Libor-fixing affair escalated.

Tullow Oil was among the biggest fallers in the top flight after it said profits will take a $440 million (£280m) hit as it writes off assets after unsuccessful drilling campaigns. It fell 2 per cent, or 29p, to 1,502p.

But Aberdeen Asset Management rebounded from Tuesday’s fall, triggered by Credit Suisse’s decision to offload its 7 per cent stake in Scottish firm. The fund manager topped the risers board with a 3.5 per cent jump to 263.8p, higher than the level at which Credit Suisse sold out.

Outside the top flight, housebuilder Taylor Wimpey was down 2.5 per cent even though it said that its markets remain stable and it expects to report an improved performance for the first half of 2012. Shares were off 1.3p at 48p.

International Greetings, the official supplier of Christmas crackers to the Queen, saw shares rise 5 per cent after it reported a jump in full-year profits driven by a surge in greeting cards sales in the UK. Shares rose 2.5p to 53.8p.

US stock exchanges were closed for the Independence Day holiday.