Monday, 16 February, 2009
Britain's leading share index ended down 0.3 per cent on Friday, led by banks dragged down by Lloyds Banking Group's plunge on a worse than expected loss at its HBOS unit, while oil stocks offered some support.
The FTSE closed 12.65 points lower at 4,189.59, after trading as high as 4,291.57. The index was down 2.4 per cent this week and is down 5.5 per cent for the year after falling more than 31 percent last year.
Lloyds slumped more than 32 percent after the lender said HBOS made a hefty loss last year due to bigger-than-expected bad loans.
'This merger is turning out to be the merger from hell for Lloyds,' said Martin Slaney, head of derivatives at GFT Global Markets.
More than 216 million Lloyd’s shares changed hands, compared with a daily average of 65.9 million in the past 30 trading days.
'We have seen this huge loss from HBOS, which was not expected at all by the market, considering only a few weeks ago they were expecting a loss of half of what they had announced,' said Angus Campbell, head of sales at Capital Spreads.
'It's terrible for Lloyd’s shareholders, terrible for HBOS shareholders, terrible for the banking sector as a whole.'
The announcement dragged other banks lower, giving up their earlier gains on news that the .S government was hammering out a programme to subsidies mortgages for homeowners before they fall into loan arrears.
Source: http://www.skynews.com.au/