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BARC Barclays Plc

183.20
1.68 (0.93%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Barclays Plc LSE:BARC London Ordinary Share GB0031348658 ORD 25P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  1.68 0.93% 183.20 183.48 183.52 185.68 182.82 183.32 54,857,915 16:35:20
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Commercial Banks, Nec 25.38B 5.26B 0.3470 5.29 27.81B

European Shares Decline After Banks Settle in Foreign-Exchange Probe -- Update

12/11/2014 6:42pm

Dow Jones News


Barclays (LSE:BARC)
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By Josie Cox 

European shares snapped a two-session climb Wednesday, pressured by lackluster eurozone data underscoring the sluggishness of the region's recovery and the Bank of England slashing its forecasts for growth and inflation.

In its closely watched quarterly Inflation Report, the Bank of England said it expects the economy to grow 2.9% next year, weaker than the 3.1% expansion seen in August, that it sees inflation "markedly" below the levels forecast in August over the coming 12 months, at around 1%.

Earlier Wednesday, data showed unemployment in the U.K. remained at 6% in the three-month period to September, slightly missing forecasts for 5.9%. Wages, however, including bonuses, rose 1% year-over-year in the period, beating forecasts of an improvement of around 0.9%.

The British pound, which had gained earlier in the session on the latest unemployment data, retraced against the dollar to trade around $1.5859, while European gilt futures rose as the FTSE 100 traded around 0.3% lower on the day.

The central bank said that the market now sees a first rate increase, which would make the currency more attractive, in the third quarter of 2015. Derivatives contracts linked to future interest rates now signal a first move in October 2015.

Underscoring the economic hurdles beyond the U.K, data showed Wednesday that factory output across the 18 countries that share the euro only partly rebounded in September from the previous month's slump.

In its final data release before the third-quarter figures, Eurostat said production by factories, mines and utilities during September was up 0.6% from August, and 0.6% higher than the same month in 2013.

That was a slightly smaller rise than economists had expected, since the median forecast of 20 surveyed by The Wall Street Journal last week was an increase of 0.7% on the month.

"This insipid figure paves the way for weak growth in the third quarter, with high chances of a flat gross domestic product print this Friday," Credit Suisse economist Mirco Bulega said, adding that a weak GDP figure--due for release on Friday--would also heap pressure on the European Central Bank to deliver more stimulus.

The Stoxx Europe 600 extended earlier losses on the news to trade 0.5% lower on the day, in line with losses on France's CAC-40. Germany's DAX-30 lost 0.9%, while the S&P 500 was indicated opening 0.2% lower. Futures, however, don't necessarily anticipate moves after the opening bell.

In terms of individual sectors, bank stocks assumed center stage Wednesday after five lenders agreed to pay a total of about $3.3 billion to U.S., British and Swiss regulators to resolve allegations they tried to manipulate the foreign-exchange market.

Shares in HSBC Holdings PLC and Royal Bank of Scotland Group PLC--the two U.K. banks involved--fell in early trade, but later retraced those declines, with analysts saying that the charges were broadly in line with expectation.

Shares in Barclays PLC, however, traded around 1.5% lower on the day after a last-minute announcement that it was pulling out of the settlement.

The bank said it had engaged with regulators and considered a settlement on "closely similar terms" to those announced on Wednesday, but that after discussions with other regulators and authorities it had decided to seek a "more general coordinated settlement."

Shares in UBS AG--the only other European bank involved--rose 0.3% at the open and later extended their rise, with analysts saying that the settlement was less harsh than what the Swiss lender had prepared for.

The U.S.-listed shares of J.P. Morgan Chase & Co. and Citigroup Inc. weren't open for trading yet. In thin Frankfurt trading, however, J.P. Morgan shares were down 0.7% and Citigroup was off 1.4%.

The Stoxx Europe 600 index of banks was down 0.2%.

The settlements resolve long-running investigations by the U.K.'s Financial Conduct Authority, the U.S. Commodity Futures Trading Commission and Switzerland's Finma, and indicate that the banks, in some cases as recently as last year, were engaged in activities designed to move one of the world's largest and most interconnected markets to benefit their own trading positions, sometimes at the expense of their clients.

James Chappell, an equity analyst at Berenberg said that overall, the settlement was broadly as expected.

"The focus should move onto potential capital return and questions are likely to be raised on Barclays and why it is yet to settle," he said.

In commodity markets, Brent crude continued to slide Wednesday, falling 0.4% on the day to $81.36.

London-listed oil explorer Tullow Oil PLC said on Wednesday it would scale back its spending on exploration to focus on producing and development assets amid lower oil prices, less successful exploration drilling offshore and a slowdown in asset transactions.

Gold rose 0.1% to $1,164.30 a troy ounce.

Katie Martin, Chiara Albanese and David Enrich contributed to this article.

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