Standard Chartered recovery continues09/08/2012 - 16:29:18
Standard Chartered shares continued to recover today following a tough defence against allegations that the bank covered up illegal dealings with Iran.
With Bank of America Merrill Lynch also upgrading the stock, Standard rose for the second day in a row, up another 4%, or 46.5p to 1362p, although it is still well below the level seen before it was branded a “rogue institution” by US regulators.
In the US, the Dow Jones Industrial Average was broadly flat as a dip in unemployment claims was offset by factory data from China which suggested a further slowdown in the Asian powerhouse economy.
In London, the broader FTSE 100 Index was also flat at 5846, after figures showed the UK trade deficit widened to a record level in June.
The goods and services deficit – the gap between imports and exports – rose to £4.3bn (€5.4bn) from £2.7bn (€3.4bn) in May, the Office for National Statistics (ONS) said, the highest level since comparable records began in 1997.
The gloomy figures have dimmed the UK’s recovery hopes because the Government is hoping for an export-led recovery, although the pound was not noticeably impacted on currency markets.
Back on London’s leading shares index, Standard Chartered was the biggest riser after it was boosted by bargain hunters.
At its lowest ebb the stock had fallen 30% from highs before the allegations were levelled against the lender.
But by yesterday’s close it had rallied 17% and has been one of the most traded shares in the last seven days, according to Hargreaves Lansdown Stockbrokers, with interest from investors up eight-fold.
Meanwhile, BSkyB shares were 10.5p higher at 753.5p after the broadcaster last night won its appeal against Ofcom’s ruling that it had to offer two of its sports channels to competitors at wholesale prices.
The ruling by the Competition Appeal Tribunal impacted BT, which fell 4.8p to 216.9p, a decline of 2%.
Shares in insurer Aviva slipped 0.4p to 317.5p after it reported a 10% drop in half-year operating profits and warned of more tough conditions to come.
However, it kept its half-year dividend in place, which helped to reduce the negative sentiment.
Music retailer HMV lost earlier gains and fell 3% after it slumped to a loss of £16.2m (€20.4m) for the 52 weeks to April 28 but said its recovery was on track. Shares fell 0.1p to 3.6p.
The group had been 8% higher earlier in trading after it reassured investors that it will return to profit in the current financial year.
It expects profits of at least £10m (€12.6m) this year as it drives more business from selling the latest iPad, Google’s Nexus tablet and wireless headphones alongside its CDs and DVDs.
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