Jumat, 22 Juni 2012

FTSE LIVE: Markets down after Moody's downgrade of the world's biggest banks

FTSE LIVE: Markets down after Moody's downgrade of the world's biggest banks

By This Is Money

PUBLISHED: 02:49 EST, 22 June 2012 | UPDATED: 09:17 EST, 22 June 2012

15:15:

The Footsie is down 39.29 points at 5,527.07.

Frozen food chain Iceland unveiled record profits rise today - its seventh set of record results in a row since Malcom Walker, who founded the firm in 1970, returned to the business in 2005. Read more about this here.

Meanwhile, Wall Street opened higher today rebounding from a sell-off in the previous session which was the SP 500's second-biggest decline of the year. The Dow Jones was up 65.7 points, or 0.52 per cent, at 12,639.27.

11:00: The UK blue chip index continues to dive, and is now 58.61 points down at 5,507.75.

Mining and commodity stocks were the biggest Footsie fallers amid fears over weaker factory output in China and signs that the US jobs market is struggling.

Vedanta Resources fell 31.5p to 898.5p and Tullow Oil dropped 46.5p to 1434p, while BP was 6.3p lower at 405.7p as oil prices continued to fall.

Among the banks, RBS was down by around 1 per cent, off 2.55p to 240.75p, as it also battled major technical problems affecting its NatWest subsidiary.

Downgrade: Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group saw their debt scores slashed amid growing fears of a meltdown in the eurozone

Downgrade: Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group saw their debt scores slashed amid growing fears of a meltdown in the eurozone

Lloyds Banking Group was flat at 31.2p after the taxpayer-backed business avoided making it onto the list of Moody's major downgrades, although its long-term rating was lowered by one notch.

Barclays slipped 1p to 201.3p and HSBC dropped 1.5p to 557.75p.

8:45:The FTSE 100 index is down 50.13 points, or 1 per cent, at 5,516.23 after opening lower at 5,566.27, extending the previous session's drop as renewed global growth worries reverberate around global markets, exacerbated by a Moody's downgrade of the world's biggest banks.

Ratings agency Moody's downgraded 15 of the world's biggest banks yesterday, lowering credit ratings by one to three notches to reflect the risk of losses they face from volatile capital markets activities, but banks criticized the move as backward-looking.

Individual euro zone countries face ‘escalating speculative attacks’ unless a lasting solution to Europe's financial c risis is found at next week's summit of EU leaders, Italian Prime Minister Mario Monti told the Guardian today.

The leaders of Germany, France, Italy and Spain will try to find common ground in Rome today to restore confidence in the euro zone ahead of a full EU summit next week, which Italy's prime minister called a defining moment.

Dangerously high borrowing costs for Spain and Italy have eased a little on market hopes for policy initiatives at the Brussels summit on June 28/29. If it falls short, both countries may be pushed closer to eventually needing sovereign bailouts.

The International Monetary Fund yesterday urged the eurozone to channel aid directly to struggling banks rather than via governments and called for the European Central Bank to cut interest rates, saying the future of the euro was at stake.

The UK blue chip index closed down 55.93 points, or 1.0 per cent, at 5,566.36 points, snapping a four-session winning streak which had seen around 2.8 per cent added to the index.

Gold gave up early gains today and was heading for its biggest weekly loss since December after growing fears of a global economic slowdown hit commodities, prompting investors to seek safety in the U.S. dollar.

Brent crude hovered below $90 today, up slightly after the previous session's plunge to an 18-month low, but prices were headed for a weekly loss as bleak data from top consumers United States and China muddied the outlook for demand.

Stocks to watch today include:

BHP BILLITON - The world's largest miner, has approved an $845million investment to keep up production at its Illawarra coal operations in Australia's New South Wales state, a move that analysts said was unexpected.

ROYAL DUTCH SHELL - The French government has backtracked on a decision to delay plans by Royal Dutch Shell to drill for oil off the coast of French Guiana, a member of parliament for the overseas territory said, after local politicians protested.

ROYAL BANK OF SCOTLAND - The bank is set to receive up to £300million less than it expected for a package of branches it is selling to Santander UK because the business has failed to hit a number of targets outlined in the deal, the Financial Times said.

CASPIAN HOLDINGS holds its annual general meeting.

UK COAL holds its annual general meeting.

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

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The markets are down yes but the banks which seem to be the object of the downgrade all seem to be up this morning!!! Just goes to show what a complete muddle everything is in.

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Why does the "market" take any notice of what Moodys says? Where were their downgrades when the banking industry was going into meltdown in 2008? Calling downgrades now is like warning of a danger of rain, when the floods have already come. Moodys should be ignored for their previous ineptitude! Findlay, Ascot

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