Newspaper article The Evening Standard (London, England)

Banks Take a Battering after US and Asia Woes

Newspaper article The Evening Standard (London, England)

Banks Take a Battering after US and Asia Woes

Article excerpt

Byline: SARAH MARKS

HIGH STREET banks were under renewed fire today as investors respondedto major sell-offs on Wall Street and Asian markets by fleeing the financialsector.

Northern Rock again topped the FTSE fallers, down 9.5p or more than 5% at162.5p. Its advisers are apparently stepping up efforts to find a rescuer, butrumours the big US banks are sitting on further undisclosed liabilities won'tmake the job easier. Alliance & Leicesterwas down 22p at 730p, Royal Bank ofScotland off 121/2p at 486p and Barclays 13p lower 6581/2p.

Some traders detected signs of bottom-feeding but only a handful of bluechipsmade headway, and the FTSE 100 was down 53.8 points at 6532.3.

Diageo, up 6p at 1095p, was cheered by a Lehman Brothers upgrade to equalweightfrom underweight on the basis that margins will improve. The drinks giant is ahaven in times of uncertainty, and there is the possibility of a merger with aglobal brewer that could lift the value per share to 1400p.

Premier Oil fell 18p to 1223p despite signing a gas agreement with NorthSumatra that will add 10,000 barrels of oil equivalent a day, a fifth of itsentire annual target. The deal was done through an Indonesian subsidiarysnapped up by Premier at the beginning of the year.

Investors in SkyePharma should be reassured by latest results for Flutiform,its potential blockbuster treatment for asthma. The new data reinforce thedrug's safety profile and will help strengthen an application for a licencefrom the US regulators, scheduled for next year. Chief executive Frank Condellacalled the test results a "significant milestone".

Now might be a good time to stock up on scandal-hit TV programme maker RDFMedia, say analysts at Kaupthing.

It has just been cleared of wrongdoing in relation to its infamous documentaryA Year with the Queen, which means the BBC and ITV should start commissioningagain soon. Kaupthing says RDF, down 21/2p at 1841/2p, looks cheap, and isupgrading the stock to buy from fair value. …

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