United kingdom Daily news: FTSE CLOSE: Barclays shares slip after Diamond exit

FTSE CLOSE: Barclays shares slip after Diamond exit

By This Is Money Reporters

PUBLISHED: 02:35 EST, 3 July 2012 | UPDATED: 11:24 EST, 3 July 2012

17.15 (close): Another tumultuous day for Barclays saw its shares slip into the red today following the resignation of its boss Bob Diamond.

The beleaguered bank's shares were down nearly 1 per cent, or 1.4p at 167.1p, after surrendering earlier gains as the chief executive was followed out of the door by chief operating officer Jerry del Missier.

But the wider FTSE 100 Index was up 47.1 points at 5687.7, or 0.8 per cent, to fresh two month highs, despite a mixed day for banks amid caution about how the rate rigging scandal will impact the rest of the sector.

Market watch: Traders are hopeful central banks around the world will launch more stimulus action to prop up ailing economies

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: 'It remains to be seen whether Barclays will eventually end up with some credit in being the first to hold its hand up over the Libor investigations.'

But he added that the spectre of further regulation, exposure to Europe and slowing global economic growth continue to overshadow the sector.
Royal Bank of Scotland was down 2.5p at 216.5p, HSBC was up 0.2p at 570.3p and Lloyds was up 0.3p at 31.8p.

Markets were boosted by hopes that the central banks will announce more stimulus amid growing signs the global economy is slowing.

A closely watched Markit/CIPS survey showed the construction sector contracted at its fastest rate for two and a half years in June.

The gloomy findings raised expectations that the Bank of England will order an increase in its quantitative easing programme this week, in a move that would boost share prices.

And the European Central Bank is expected to cut interest rates amid the run of worrying economic data in recent weeks.

Meanwhile, traders believe there is further scope for stimulus measures in Japan and China.

The Dax in Germany and the Cac-40 in France were both up around 1 per cent, while the Dow Jones Industrial Average was ahead 0.4 per cent as the London market closed amid encouraging factory orders data.

The pound was down against the euro at 1.24 as speculation that the Bank of England will print more money weakened sterling. But the pound was up against the dollar at 1.57 as the greenback weakened against most currencies.

Back in London, heavily weighted miners were the main beneficiaries of the stimulus speculation, with Vedanta the top riser, up 55p, or 6 per cent, at 961p.

Outside the top flight, catalogue and online shopping group N Brown saw its shares rise 4 per cent after it announced a 1.9 per cent hike in like-for-like sales in the 17 weeks to June 30, lifted by strong demand for menswear, footwear and lingerie. Shares were up 10.5p at 259p.

Meanwhile, soft drinks firm Britvic's shares were down 5 per cent after it recalled Robinsons Fruit Shoot and Fruit Shoot Hydro packs featuring a new cap design.

It estimates the potential safety issue caused by a small number of damaged caps will hit pre-tax profits by up to Â£5 million in the current year. Shares fell 17.8p to 316.7p.

The biggest Footsie risers were Vedanta Resources up 55p at 961p, Antofagasta ahead 42p at 1139p, Kazakhmys up 27p at 757p, and Evraz ahead 9.2p at 267.7p.

The biggest Footsie fallers were Aberdeen Asset Management down 9.7p at 255p, Kingfisher off 7.2p at 281.8p, ITV down 1.5p at 76.4p, and ICAP off 5p at 334.8p.

15.15: The Dow Jones is up 32.9 points at 12,904.3 after U.S. factory orders outstripped expectations.

In London, the FTSE 100 has added to gains and is ahead 29.1 points at 5,669.7.

14.10:

Hopes that central banks are about to launch a fresh round of stimulus measures are helping to keep stocks in the black today.

The European Central Bank is forecast to cut interest rates this week as the run of poor global economic data continues. Traders also believe there is further scope for more stimulus action in Japan and China.

And in the UK, a contraction in the closely-watched Markit/CIPS construction survey in June has raised expectations that the Bank of England will order an increase in its quantitative easing programme this week. Read more here.

'Todayâ€™s economic news was a real clincher in terms of ensuring that the monetary policy committee will increase its asset-purchase programme by at least Â£50billion when it meets on Thursday,' said FXPro.

'The construction purchasing managers' index fell below 50 last month to the lowest reading since late 2009; no doubt the damp weather weighed on this outcome, but at the same time it is consistent with most recent indicators suggesting that the economy is still really struggling.'

The FTSE 100 is up 13.8 points at 5,654.4 in early afternoon trading, with heavily-weighted miners the main gainers from the stimulus speculation. Vedanta was up 42.5p at 948.5p.

Barclays shares are 4.5p higher at 172.9p as traders react to the departure of boss Bob Diamond.

Soft drinks firm Britvic's shares were down 2 per cent after it recalled Robinsons Fruit Shoot and Fruit Shoot Hydro packs featuring a new cap design.

It estimates the potential safety issue, with a small number of damaged caps, will hit pre-tax profits by up to Â£5million in the current year. Shares fell 7.6p at 326.9p.

Dow Jones futures are flat ahead of pending U.S. factory data and tomorrow's Independence Day holiday.

12.20:

Barclays has extended gains as investors contemplate the bank's future without Bob Diamond at the helm. The stock is up 4 per cent or 6.18p at 174.58p shortly after midday.

'The news came as a shock at first, given the hasty U-turn as Diamond suggested he will remain at the top yesterday,' said Ishaq Siddiqi of ETX Capital.

'His departure, however, was not too much of a surprise given the pressure he faced in light of the Libor scandal.

'The stock has been hammered followin g news of the Libor scandal last week, offering investors an entry point to pick up the stock at a lower price.

And he added: 'The fallout of Diamondâ€™s resignation has reportedly prompted the bankâ€™s chief operating officer Jerry del Missier to walk out the door. And, with several major banks also reportedly involved in Libor manipulation, todayâ€™s events could be a sign of things to come for the UK banking system.'

The FTSE 100 is ahead 16.2 points at 5,656.8.

10.45:

Barclays shares are volatile in the fallout from the departure of boss Bob Diamond.

The stock fell 3 per cent in early trading but has since moved up 2 per cent or 3.1p to 171.5p as traders weigh up the impact of his loss on the bank.

Diamond resigned in a storm of criticism over Barclays' role in the Libor rate-rigging scandal, and further explosive revelations are anticipated when he gives evidence to an MPs' committee tomorrow.

Other banking stocks were mixed amid caution about how the Libor furore will impact the rest of the sector - HSBC was up 1.2p at 571.2p, Royal Bank of Scotland was down 2.2p at 216.2p, and Lloyds was flat at 31.5p.

'The longer Bob Diamond had stayed on as CEO the more bad press the bank would have received as calls for his resignation would have grown and grown,' said Simon Denham of Capital Spreads.

'For banking in general Bob Diamond was seen as a figure head, one of the best in the class and has only been CEO for a short while having taken over from his predecessor.;

And he added: 'Itâ€™s the ramifications for other banks that is now the question. How far does this go from here, as Barclays is just the first of many to be fined and so a ll the other CEOs will be nervously weighing up their options.'

The broader FTSE 100 has made tentative gains, trading up 13.2 points at 5,653.9.

Markets have been boosted by hopes that the Bank of England and the European Central Bank would announce more stimulus measures this week as a run of poor economic data continued yesterday.

Outside the top flight, catalogue and online shopping group N Brown saw shares rise after it announced a 1.9 per cent hike in like-for-like sales in the 17 weeks to June 30, lifted by menswear, footwear, lingerie and home.

Shares were up 3.6p at 252.1p. Read more here.

8.40: The FTSE 100 has opened flat, up just 1 .2 points at 5,641.9 after two sessions of strong gains on hopes for fresh stimulus measures by central banks across the world.

Barclays is 0.4p higher at 168.8p after boss Bob Diamond quit under heavy pressure over his bank's involvement in the Libor rate-setting scandal.

Sluggish economic data from the U.S. and Europe has fuelled investors' expectations that central banks will soon take more measures to kick-start their economies.

A majority of analysts expect the European Central Bank to trim interest rates at its meeting on Thursday, with most predicting a 0.25 percentage point cut to 0.75 per cent.

The survey was taken before European leaders agreed a more flexible use of eurozone rescue fund late last week, but given recent economic data and rhetoric from the central bank's policymakers, analysts are still betting on more monetary easing.

Monday's grim U.S. ISM manufacturing index - which registered a contraction in the sector for the first time since July 2009 - also boosted speculation that the Federal Reserve will embark on a third round of asset purchases, known as 'QE3'.

This could happen as soon as the central bank's next meeting from July 31 to August 1.

The FTSE 100 closed up 69.49 points at 5,640.64 yesterday, almost matching Friday's 1.4 per cent leap, led by gains in banks and commodity stocks.

Brent crude climbed above $98 per barrel as escalating tensions between Iran and the West offset concerns that gloomy manufacturing data from China, the U.S. and Europe will hurt oil demand.

Britain's economy remains weak but an upturn in exports to countries outside Europe suggests growth could pick up later this year, the British Chambers of Commerce said.

Bank of England consumer credit and mortgage lending data for May and Markit/CIPS construction data for June will be released later.

Stocks to watch today:

Barclays: Boss Bob Diamond has quit with immediate effect. Outgoing chairman Marcus Agius, who resigned yesterday, will lead the search for a new chief executive.

Diamond is threatening to rev eal potentially embarrassing details about Barclays' dealings with regulators if he comes under fire from MPs at the Treasury Select Committee, according to people close to him, Reuters has reported.

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