Standard Chartered knocks UK shares

Comment on this story
StandardChartered REUTERS A woman walks past a Standard Chartered bank in London.

UK blue chip stocks fell on Tuesday as shares of Standard Chartered were hammered after US regulators said the bank “schemed” with the Iranian government, offsetting gains in mining and energy stocks.

Standard Chartered shares plunged 23 percent to their lowest in three years after New York's top bank regulator threatened to strip the lender of its state banking license, saying it hid $250 billion in transactions tied to Iran, in violation of US law.

“Standard Chartered is the main news today. What we thought was a bank that had got away with no scandal, now got hit by what is possibly the worst of all,” said IG index market analyst Chris Beauchamp.

Oriel Securities double-downgraded its rating for London-based Standard Chartered to “reduce” from “buy” in a note, saying the stock was likely to underperform pending the outcome of the investigation.

The bank topped the FTSE 100 loser board, and turnover in the stock was nearly 10 times its 90-day daily average by mid-session.

At 12:14 SA time, the FTSE 100 was down 18.96 points, or 0.3 percent, at 5,789.81, paring some of it recent gains but trading near the 5,800 point mark which it crossed on Monday for the first time in three months.

Risk-sensitive miners proved the biggest support to the index, boosted by higher copper prices, as investors waited for new data from top metals consumer China later in the week.

Xstrata was one of the sector's biggest climbers. Its shares rose 2 percent after the Anglo-Swiss miner reported better-than-expected first-half results, as cost cuts helped cushion the impact of weaker prices and reduced copper production.

There was also some brighter news on the UK economy with June industrial and manufacturing output falling less than expected in June, pointing to a modest upward revision of second-quarter gross domestic product (GDP).

“It (the manufacturing output) is a lot better than expected, but it is too early to see the effect on industrials and the sector could also be down given the sentiment around financials. But we expect industrials to rise on the back of the manufacturing data later on in the day,” said Coutts strategist James Butterfill. - Reuters


sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.