Both London and European bourses started the day in a more subdued fashion with markets concerned over banking shares and renewed US trade tensions ahead of a G7 summit this weekend.
Banks in focus as UK government sells RBS stake
Bank shares are on the move this morning as the UK government came good with its plans to sell 7.7% stake in the Royal Bank of Scotland (LON:RBS).
The sale fetched £2.51 billion, only a fraction of the £45.5 billion the government had spent in 2008 to bail the bank out at the height of the financial crisis. A total of 925 million shares were placed on the market Tuesday at 271 pence each, a 3.5% discount to RBS's closing price on Monday as part of a process to sell off a total of around £3 billion of RBS shares by March 2019. Even with carefully timed sales the government may not be able to regain the full sum it put into keeping the bank afloat. RBS is currently working through a turnaround plan designed to build it back up to its pre-financial crisis strength.
The bank’s shares fell 3.60% in early trade Barclays (LON:BARC), Lloyds (LON:LLOY) and Standard Chartered (LON:STAN) shares also followed suit.
Focus turns to G7 meeting as US trade tensions linger
Meanwhile, the focus is shifting to the meeting of the finance ministers from US, Canada, France, Germany, Italy, Japan and the U.K. at a G7 meeting on Saturday where the key topic of discussion will be the US decision to introduce tariffs on the import of metals from Europe, Canada and Mexico. The US and China have not been able to overcome the issue of tariffs and a round of talks between the two countries last weekend ended with no agreement, stoking fears that a major escalation of a tit-for-tat approach will start affecting global economic growth.
UK retail sales improve in May
UK retail sales regained the spring in their step in May thanks to the sunny weather, the Royal Wedding and the FA Cup Final with spending on garden furniture, clothing and food rising on the month. May sales were up 2.8% year-on-year compared with a 4.2 % drop the previous month.
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