LONDON MARKETS: FTSE 100 Rises As Bank Shares Recover From Downbeat Start
05 December 2016 - 9:27PM
Dow Jones News
By Carla Mozee, MarketWatch
Shares in RBS rise after bank settles with some litigants
U.K. stocks rose Monday, with bank shares shaking off 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 6,784.50, 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 1.7%. 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 2.6%, and Lloyds
Banking Group (LLOY.LN) (LLOY.LN) added 1.1%, but Standard
Chartered (STAN.LN) shed 0.2%.
Miners in focus: Meanwhile, miner Antofagasta PLC (ANTO.LN)
topped the benchmark as its shares added 2.7%, 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 1.9% and 1.2%,
respectively.
But fellow miner Randgold Resources PLC (RRS.LN) lost 2.9% 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 EUR1.1945, compared with
EUR1.1931 late Friday in New York.
Monday's docket: Activity in the U.K. services sector hit a
10-month high in November, according to a new purchasing managers'
index reading. IHS Markit/CIPS said the services PMI for the month
was 55.2, compared with the 54.0 estimate generated in a FactSet
survey of analysts.
The pound pushed up as high as $1.2744 after the data, but
eventually pulled back to $1.2703. Sterling late Friday bought
$1.2712.
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.
(END) Dow Jones Newswires
December 05, 2016 05:12 ET (10:12 GMT)
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