Markets: Downgrade sends RBS shares down

SHARES in RBS were lower yesterday after the state-backed bank was downgraded by a broker and the wider market retreated from last week’s high point.

Investec said that following an “impressive” recent rally, RBS’s earnings potential seemed too weak to support the valuation. Analyst Ian Gordon said: “We have never regarded RBS as ‘uninvestable’. However, at today’s level, we see the ‘risk:reward’ as disproportionately skewed to the downside.”

Shares in the bank eased back 4.6p to close at 274.4p, despite the company selling a holding in luggage maker Samsonite.

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But temporary power firm Aggreko was helped by a broker note from Seymour Pierce upping its price target to 2,700p. Shares in the Scottish firm added 17p to 2,400p.

After surging on the back of the US Federal Reserve’s multi-billion dollar stimulus package at the end of last week, the FTSE 100 Index slipped 22 points to 5,893.5 as Spanish bond yields pushed back towards the 6 per
cent danger zone. A fresh wave of protests against austerity heightened concerns over Spain’s ability to cut debt and return to growth.

Profit-taking following Friday’s rally meant miners were lower. Evraz was the biggest top flight faller, off 9.7p to 284p, while Anglo American declined 47.5p to 2,036.5p.

NEW YORK: Wall Street fell last night in light trading after a rally that drove the Standard & Poor’s 500 Index last week to its highest level in nearly five years and as falling oil prices hit energy shares.

The Dow Jones industrial average slipped 40.19 points, or 0.30 per cent, to close at 13,553.18 while the broader S&P 500 shed 4.58 points, or 0.31 per cent, to finish at 1,461.19. The Nasdaq Composite Index was 5.28 points, or 0.17 per cent lower, closing at 3,178.67.