LONDON MARKETS: FTSE 100 Rises As Bank Shares Recover From Downbeat Start
05 December 2016 - 8:39PM
Dow Jones News
By Carla Mozee, MarketWatch
Shares in RBS move higher after bank settles with some
litigants
U.K. stocks rose Monday, with bank shares shaking off early
losses as investors assessed the fallout from the resignation of
Italy's prime minister following a referendum defeat over the
weekend.
The U.K's FTSE 100 was up 0.8% at 6,785.18, led by the basic
materials, industrial and consumer-goods sectors. It recovered
after a downbeat start, when it opened 0.4% lower.
London-listed bank shares managed to swing higher, as investors
weighed up the prospects for banks across Europe after a referendum
in Italy raised fears about the integrity of the eurozone
(http://www.marketwatch.com/story/italian-stocks-slump-after-voters-reject-renzi-in-referendum-2016-12-05).
In the U.K., shares of the Royal Bank Of Scotland Group
(RBS.LN)(RBS.LN) gained 2%. The move came after the mainly
state-owned bank agreed to pay up to 800 million pounds
(http://www.marketwatch.com/story/rbs-settles-over-2008-shareholder-rights-issue-2016-12-05)
($1.02 billion) to settle with three litigants in a legal dispute
over shareholder rights. Barclays PLC (BCS) rose 2.4% and Lloyds
Banking Group (LLOY.LN) (LLOY.LN) added 1.5%, but Standard
Chartered (STAN.LN) shed 0.2%.
Miners in focus: Meanwhile, miner Antofagasta PLC (ANTO.LN)
topped the benchmark as its shares added 3%, tracking a nearly 2%
increase for copper futures . Sector peers Rio Tinto PLC (RIO)
(RIO) (RIO) and Glencore PLC (GLEN.LN) were also among the
strongest advancers, as their shares moved up 2.3% and 2.1%,
respectively.
But fellow miner Randgold Resources PLC (RRS.LN) lost 2.7% as
gold prices pulled back nearly 1%.
Italian vote: In Italy, banks were recovering somewhat after an
initial fall, but remained under pressure after voters rejected a
proposal to reform the country's constitution
(http://www.marketwatch.com/story/italian-stocks-slump-after-voters-reject-renzi-in-referendum-2016-12-05).
Prime Minister Matteo Renzi-- who said changes needed to be made to
aid the economy and Italy's embattled banking sector -- announced
he will resign from his post later Monday after the decisive
defeat.
"The rejection of reforms, even if imperfect, also sends a
message regarding the political tone in Europe ahead of further
elections in France and Germany next year," said Simon Smith, chief
economist at FxPro, in a note.
Against the euro, sterling bought EUR1.1978, compared with
EUR1.1931 late Friday in New York.
Today's docket: Back in London, the Supreme Court will hear the
U.K. government's appeal against a November ruling on invoking
Article 50. A lower court ruled that parliamentary approval is
needed for the government to trigger the article, which mark the
formal start to negotiations for the U.K. to leave the European
Union. Prime Minister Theresa May has said she wants to invoke
Article 50 to begin the negotiations by the end of March.
The pound traded at $1.2697 compared with $1.2712.
A reading on U.K. services activity in November is due at 9:30
a.m. London time, or 4:30 a.m. Eastern Time.
(END) Dow Jones Newswires
December 05, 2016 04:24 ET (09:24 GMT)
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