FTSE higher but there is banking trouble ahead

Better-than-expected UK retail numbers and another European country declaring that it is virus free helped lift London stocks

Charts (4)

Better-than-expected UK retail numbers and another European country declaring that it is virus free helped lift London stocks. US-China relations seem to be thawing and China now plans to step up its buying of US agricultural products, fulfilling its part of the agreement that was part of the Phase One of the Sino-US trade deal. Markets have shrugged off the ongoing weakness in the US job market where initial jobless claims increased more than expected and instead are focusing on the bounce backs in the economy that is accompanying the reopening across the UK and Europe.

But trouble might be brewing.

The shocking loss at Wirecard, the German online payment processor, which claims that fraudsters have taken €1.9 billion from its accounts, has put the company in a perilous positon. It was due to publish its results tomorrow but because of the gaping hole it may not do that, thus giving banks the option to terminate €2 billion in loans they have extended to Wirecard. Although its links with UK banks are not clear yet there is some nervousness in London where Lloyds Bank, normally the by far the most traded share in London, has slipped into the red and is seeing only a fraction of its usual traffic.

Among the main FTSE risers are drinks maker Diageo and exhibition organiser Informa, while oil firms also rallied on the back of stronger oil prices.  

Iraq, Kazakh pledge lifts Brent crude

OPEC+ has intensified pressure on those members which don’t honour their production cut commitments, particularly Iraq, Nigeria and Kazakhstan, and as part of this has introduced monthly monitoring. The monitoring panel had its first meeting yesterday and managed to extract promises from Iraq and Kazakhstan that they will make up for their overproduction in May. Brent crude’s rally of over 2.3% this morning made up for losses this week, caused by still rising stock levels in the US.

More from FTSE 100


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.