Markets: Standard Chartered bounces on talks

Shares in Standard Chartered continued their rebound amid reports the bank was trying to reach a settlement with US regulators ahead of Wednesday’s showdown with a hostile New York watchdog.

The London-based lender faces charges it hid $250 billion (£160bn) of transactions linked to Iran but strongly denies wrongdoing on that scale.

In a “buy” note, Investec analyst Ian Gordon called the upcoming hearing in New York a “show trial” with disturbing parallels to Stalin’s USSR, but said Standard Chartered may be made to pay “an inflated price to settle a narrow procedural breach” in order for the regulator to save face.

“Even with such an inequitable outcome, given Standard Chartered’s strong balance sheet there would be no capital issue,” he added.

Shares in the bank gave back some of their earlier stronger gains to close 7p higher at 1,333.5p. The wider market was lower amid speculation that Germany may oppose bond buying by the European Central Bank (ECB). The FTSE 100 Index was down 15.2 points at 5,831.9.

Weak economic data from Japan contributed to the defensive mood, weighing on resource stocks. Vedanta Resources dropped 20p to 977p and Antofagasta fell 16p to 1,117p. By far the biggest faller was oil services firm Petrofac after a 37.5 per cent rise in first-half profits was overshadowed by confirmation that a number of contract awards have been delayed. Its shares lost 5.2 per cent or 81p to 1,486p.

Outside the top flight, shares in recruitment firm Michael Page International fell 2 per cent to 371.2p after it reported a slide in profits at its UK arm, as the country’s beleaguered banking sector continued to suffer.

NEW YORK: Wall Street fell after six days of gains for the S&P 500 as data showed Japan’s economy grew much less than expected in the second quarter, a reminder of the headwinds faced by the global economy.

The Dow Jones industrial average dropped 89.97 points, or 0.68 per cent, to 13,117.98, the Standard & Poor’s 500 Index dropped 7.22 points, or 0.51 per cent, to 1,398.65 and the Nasdaq Composite Index dropped 15.83 points, or 0.52 per cent, to 3,005.03.