Banking shares fall after Deutsche Bank woes but United Utilities upbeat

Discussion in 'Market News' started by Lily, Sep 27, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
    Likes Received:
    Investors nervous about banking sector and seek out havens

    Worries about Deutsche Bank are currently outweighing the relief rally which followed the US presidential debate, with leading shares now deeper in the red.

    So investors are looking for safer stocks, and utility companies are fitting the bill. Severn Trent is up 20p at £24.83 with SSE 18p better at £15.46.

    Although bid speculation has raised its head recently the main appeal for investors in United Utilities remains its defensive nature, healthy yield and aim of increasing its dividends in line with inflation through to at least 2020. In the volatile and uncertain markets post Brexit, and in a very low interest rate environment, those are powerful attractions for investors seeking income with lower risk.

    The continuation of Deutsche Bank’s decline seems to have spoilt the post-presidential debate relief, with the markets resuming a lesser version of yesterday’s fall.

    The German bank is now down another 3%, and is threatening to drop under €10 for the first time in around 30 years. This has sparked another round of losses in the European banking sector, with Barclays, HSBC and Societe Generale all seeing notable declines. Royal Bank of Scotland actually surpassed Deutsche Bank’s morning drop, percentage-wise at least, with investors fearful that the same kind of fine could hit RBS when its settlement with the US Department of Justice is finally revealed.

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