Barclays: FTSE 100 giant’s shares bounce back after volatile trading
Shares in Barclays rallied on Tuesday morning after a bruising week.
The FTSE 100 lender has been caught in the chaos of Trump’s tariff onslaught.
The firm was among top banks, including HSBC and Standard Chartered, which led the blue-chip index’s top fallers as markets sunk.
Barclays stock was down nearly ten per cent after China hit back with tariffs against the US.
Whilst HSBC and Standard Chartered’s losses were driven by the lender’s ties to Asian economies, Barclays investment arm drove its slump.
Russ Mould, investment director at AJ Bell, said: “In Barclays’ case, its investment bank is heavily geared into how the financial markets performed.
“Tumbling, or volatile, markets are likely to deter merger and acquisition activity and also new market floats, both areas where there are fat fees to be made.”
However, as the FTSE 100 entered calmer waters on Tuesday, Barclays climbed nearly three per cent.
Meanwhile, HSBC and Standard Chartered were still stuck in the red.
Barclays seen as ‘geared play’ on economy and markets
Lloyds and Natwest, which have a domestic-lean, have been able to avoid severe losses. Lloyds was up over two per cent and Natwest one per cent in early trading.
John Cronin, founder of SeaPoint insights, said: “Barclays has seen more significant selling pressure than UK domestic-focused peer banks in recent days.
“This is a function of its reliance on cyclical Investment Banking revenues as well as its significant exposure to the US consumer by virtue of its US cards business.”
Mould noted whilst Barclays and its peers were viewed as a “geared plays on economies and financial markets on the way down, they are likely to be seen as geared plays on them if they recover.”
“After its fall, Barclays trades on just 0.7 times historic book value and it is the cheapest of the Big Five FTSE 100 banks on this measure,” he added.
“If contrarian investors start to sniff around for some value amid the wreckage, then those are the sort of multiples which may catch their eye.”