FTSE 100 watch: RBS and stronger pound weigh on Footsie

FTSE 100 watch: RBS and stronger pound weigh on Footsie
Written by:
Alice Young
5th June 2018
Updated: 11th March 2020

The UK benchmark index has fallen into the red in today’s session, pressured by a rise in the pound and a fall in Royal Bank of Scotland (LON:RBS), after the UK government moved to trim its stake in the bailed-out lender at a loss for the taxpayer. Carnival (LON:CCL) is also underperforming the FTSE 100 following downbeat comments at Morgan Stanley.

FTSE 100 slips into the red

As of 12:32 BST, the Footsie had lost 27.12 points to stand 0.35 percent lower at 7,714.17. The blue-chip index has given up some of the previous session’s gains, pressured by a rise in the pound which advanced on the back of a strong services purchasing managers’ index.

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“A strong services PMI and weakness across the banking sector have conspired to keep the FTSE 100 from making further gains this morning,” Chris Beauchamp, chief market analyst at IG, commented, as quoted by Proactive Investors.

Individual blue-chip movers

RBS has been one of today’s most notable Footsie fallers as the government moved to trim its stake in the bank from 70.1 percent to 62.4 percent. The interest was offloaded at 271p per share, triggering a loss for the taxpayer. The lender’s shares are currently changing hands 3.70 percent lower at 270.50p.

Carnival has been another prominent blue-chip faller after Morgan Stanley lowered its earnings per share forecasts for the cruise operator.

“We remain relatively cautious on the cruise lines given the high and increasing level of industry supply growth, slowing yield momentum and weakness in the Caribbean and China (both critical markets for supply absorption),” the broker said in a note, as quoted by Reuters. Carnival’s share price is 5.89 percent worse off at 4,586.00p.

The FTSE 100 was 0.42 percent down at 7,708.99 points as of 12:49 BST on Tuesday, 05 June 2018.

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