STOCK MARKET WATCH -- Friday, 22 June 2012

[Ghost Dog]

27. London financial stocks shrug off downgrades

London’s banking stocks brushed off news of Moody’s downgrade to credit ratings across the global sector on Friday, making up opening losses to rally in afternoon trade.

HSBC was 0.5 per cent higher at 562.1p after it defied expectations for a two-notch downgrade ahead of the long-awaited announcement to receive only a one-notch cut.

Barclays was downgraded by two notches but its stock rose 0.6 per cent to 203.6p as traders doubted the news would have much significant market impact.

Royal Bank of Scotland, which received a one-notch downgrade, gained 0.7 per cent to 245.1p, off a session low over the morning which took it to 234.27p. RBS, which faces the prospect of having to post £9bn in collateral after the cut, hit back over Moody’s decision, saying it was “backward looking”.

Nonetheless, Moody’s action leaves the affected companies likely to face increased funding costs in the already stressed capital markets, which prompted the long-awaited review in the first place...

/... http://www.ft.com/intl/cms/s/0/39a0a442-bc36-11e1-a470-00144feabdc0.html#axzz1yWKFPhuU


- Oh, so now suddenly if the City says so, those rating agencies aren't so infallible nor so implacable after all.