UK bank shares rise on optimism about lockdown easing
Shares in major UK banks rose today on increased optimism about lockdown measures easing globally.
HSBC shares rose 2.2 per cent to 393p, Lloyds Banking Group shares rose nearly 4.7 per cent to 33.4p, Barclays shares rose nearly 2.5 per cent to 122p, Royal Bank of Scotland shares rose 2.6 per cent to 123p and Santander shares rose nearly six per cent to 198p.
Michael Hewson, chief market analyst at CMC Markets, said it had been an extraordinary rally in recent weeks. He said stocks seem “to be able to shrug off anything that can be thrown at them”.
The key driver of the rise, he said, was massive central bank fire power supporting the markets in “a bonanza of cheap money”. European investors are hoping that the European Central Bank will unleash more tomorrow.
On top of this, markets over the last two weeks have been fuelled by countries’ moves to lift their coronavirus lockdowns. That has helped companies whose shares were in the doldrums, such as travel firms, energy companies, and banks.
Jim Reid of Deutsche Bank said there had been a “value-growth rotation”. Growth stocks such as the tech giants previously led the rally. But they are now losing out to value stocks such as lenders that are trading at big discounts.
Joshua Mahony, senior market analyst at trading platform IG, said: “Ultimately this recent rebound for value has been borne out of an overwhelming optimism in anticipation of reopening measures throughout Europe.”