Banks drop on Italian election concerns
U.K. stocks returned from the long bank holiday week with sharp losses, led lower in part by a slide for International Consolidated Airlines Group SA after a major IT glitch at British Airways.
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The FTSE 100 index dropped 0.5% to 7,507.88, on track for its first loss in four sessions. The London market was closed for trade on Monday due to a holiday.
Shares of IAG (IAG.LN) (IAG.LN) posted one of the biggest losses, down 3% after hundreds of British Airways flights were grounded over the weekend due to a far-reaching computer failure. Spanish-listed IAG shares (IAG.LN) rose 0.8% after sliding 2.8% in Monday's trade.
The airline said Tuesday it was back to a full schedule at London's Heathrow and Gatwick airports.
Analysts at Citigroup estimated that the IT problems could cost British Airways around EUR100 million (http://www.marketwatch.com/story/the-bill-for-british-airwayss-it-carnage-111-million-citi-estimates-2017-05-29) ($111 million) for the IT problems, comprised of EUR40 million in lost revenue and EUR60 million in customer compensation.
Banks were also adding pressure in London, tracking losses for their European counterparts on fears of an early election in Italy. Italians will head to the polls no later than the spring of 2018, but Matteo Renzi, the leader of Italy's ruling centre-left Democratic party, said in a weekend interview that it would make sense to have the vote in September, when a German election is also planned.
Shares of Barclays PLC (BCS) (BCS) fell 1.3%, HSBC Holdings PLC (HSBA.LN) (HSBA.LN) (HSBA.LN) gave up 0.6% and Lloyds Banking Group PLC (LLOY.LN) (LLOY.LN) slipped 0.4%.
Royal Bank of Scotland Group PLC (RBS.LN) (RBS.LN) dropped 0.9% after a group of investors on Monday accepted a GBP200 million settlement from the bank. The settlement ends a long legal fight over allegations RBS misled the investors in the run-up to the lender's government bailout during the financial crisis.
(END) Dow Jones Newswires
May 30, 2017 04:34 ET (08:34 GMT)