Trump stumped: UK banking shares have fallen ahead of US figures as the FTSE 100 dipped

Emma Haslett
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Banks stumbled in early trading (Source: Getty)

Banking stocks dragged the FTSE 100 lower in morning trading as investors awaited results from a trio of the US' largest lenders.

Standard Chartered and HSBC both fell 1.7 per cent, to 709.4p and 644.3p respectively, while Royal Bank of Scotland fell 1.4 per cent to 228.3p. Barclays was also hit, sliding one per cent to 211.6p. The FTSE 100 fell 0.5 per cent, to 7,310.5 points.

The falls came ahead of first-quarter results from Wells Fargo, JP Morgan and Citigroup, which analysts expected to report modestly higher revenues.

Lenders are braced for news over regulatory changes in the US, after Donald Trump promised to scrap the so-called Dodd Frank rule, which imposes capital lending ratios on banks.

Meanwhile, the dollar, which was hit in early trading by more comments from Trump on Nato, China and Russia, regained some of its losses, climbing from a low of £0.7954 to sit flat against the pound, at £0.7974, and rising 0.2 per cent against the euro to €0.9396.

"Having spoken out against a weak dollar and the Fed’s policies, it looks like someone in Washington has laid out the facts for the President," said Chris Beauchamp, of IG.

"As a result, markets are continuing to unwind the rally that has dominated in stocks since November, while the US dollar is in retreat across the board. It is, of course, folly to try to work out policy from the president’s statements, but the shift to safe havens goes on, with low volumes ahead of a long weekend amplifying the moves.

Connor Campbell, financial analyst at Spreadex, pointed out trading may be slightly skewed as investors geared up for the four-day bank holiday.

"Trump’s comments about the dangers of a strong dollar continued to drive trading this Thursday, the reaction perhaps being slightly overdone thanks to subdued volumes ahead of the Easter break," he said.

"Looking to the US open and the Dow Jones seems unlikely to take much solace in the weakened dollar. The futures are pointing to a 50 to 60 point fall after the bell, meaning the Dow is now only a handful of points from sitting at a fresh 2 and a half week low."

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