BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Draghi: Eurozone will decline without vital productivity growth

It’s productivity, stupid. European Central Bank president Mario Draghi has become the latest major policymaker to warn of the long-term economic damage posed by chronically low productivity growth, as he urged eurozone governments to take action to lift growth and stoke innovation. Speaking in Madrid on Wednesday, Mr Draghi noted that productivity rises in the […]

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Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Categorized | Equities

Torrid quarter ends in broad stock rebound

Posted on September 30, 2015

A large computerised display of the British FTSE 100 index is pictured in London, on September 8, 2008. The London Stock Exchange said Monday it had been forced to halt trade after experiencing connectivity problems with some clients. "There was a connectivity issue this morning which affected some clients so we have suspended connectivity in order to bring it back in a controlled fashion," an LSE spokeswoman told AFP. At its suspension the FTSE 100 showed a gain of 3.81 percent at 5,440.20 points. AFP PHOTO/Shaun Curry (Photo credit should read SHAUN CURRY/AFP/Getty Images)©AFP

An outbreak of bargain hunting at the end of a torrid quarter for stocks lifted nearly every FTSE 100 constituent on Wednesday, with Glencore among the best gainers.

Shares in the Swiss-based miner and commodities trader — which have marched lower in lockstep with falling metals and oil prices — bounced back 7 per cent to 85.8p. Only J Sainsbury made a stronger gain, after the supermarket group lifted its profit guidance.

    Wednesday’s recovery cut into Glencore’s decline over September, which reached 45 per cent by the end of the previous session. Over the third quarter, the shares are down 69 per cent. The company also took the unusual step of issuing a statement saying it remains “operationally and financially robust”, which followed a flurry of doom-laden analyst commentary on the company.

    Wider mining stocks made more modest gains for the day, also limiting longer-term losses. Antofagasta was 1 per cent higher at 496p, while BHP Billiton regained 0.9 per cent to 987½p. Anglo American was up 0.8 per cent at 547.6p.

    Overall, the main London stock index rose 1.8 per cent to 6,014.39, a gain of 105 points. But it came after a decline of 10.6 per cent from the start of July to the close of the previous session, leaving it on course to record its steepest quarterly decline since 2011. Over the calendar year, the FTSE 100 is down 10 per cent.

    The international FTSE Eurofirst 300 was up 2.2 per cent at 1,365.37, after a loss of 11.5 per cent over the third quarter to Tuesday’s close.

    There were warnings that Wednesday’s respite could prove fleeting, with investors’ attention starting to turn back towards the macroeconomic picture and closely watched US jobs numbers due out at the end of the week.

    “The commodity glut and decelerating emerging markets is not going to go away any time soon,” said Mike McCudden, head of derivatives at Interactive Investor.

    “Sentiment can change at the flick of a switch these days. Equities should start to cool down as traders begin to get nervous ahead of key jobs data from the US on Friday.

    Michael Hewson, chief market analyst at CMC Markets, said: “The ‘buy the dip’ strategy, has by and large, worked extremely well since 2009. When commodity prices bottomed in 2008, the combined effects of a Chinese stimulus program and US quantitative easing saw a swift about turn in prices in a matter of months.

    “But it’s hard to see something similar happening now with oil and mining companies taking a scalpel to capex in large chunks [and] investors are having to contend with a US Federal Reserve looking to tighten policy and not loosen it.”