Barclays rally today to two-week highs as the risk-on sentiment boost equities to recent highs. Banking sector sent FTSE 100 above the 50-day moving average and at two-week highs. Lloyds is 3.8% higher at 29.51, NatWest is 4.16% higher at 118.85, and HSBC is 4.59% higher at 346.30.
Barclays announced the first-half earnings report on July 29. The pre-tax profits fell to £1.2bn from £3bn the previous year. The net operating income dropped 20% to £7.8bn.
Total provisions reported at £3.7 billion with estimates now exceeding £5bn for 2020. Second-quarter impairment provisions came higher than the £1.4bn forecast amid the coronavirus lockdown.
The cancellation of the dividends helped banks to increase the capital ratio. Barclays’ capital ratio increased to 14.2%, from 13.1%.
Banking unit income fell 11% due to lower interest rates, as well as lower-income due to the removal of specific fees in overdrafts and UK cards. The forex, fixed income, and commodities unit reported a 60% jump in revenue to £1.4bn in the 2Q. Barclays management is under pressure from its main shareholder Bransom who wants the bank to follow the Deutsche Banks restructuring path cutting the investment banking and trading unit.
Barclays Share Technical Analysis
Barclays is 5.14% higher at 112.12 in an attempt to return to the upward path that started from the March 16 lows. Barclay’s share breaks emphatically today above the 100-day moving average, and that give the bulls the upper hand, at least for the short term.
Resistance for Barclays stands at 112.24 today’s top. More selling pressure awaits at 115.12 the 50-day moving average, which if breached would open the way for 121.14 the high from July 21.
On the other hand, initial support for Barclays share would be met at 106.88 the daily low. The next support level stands at 103.44 the low from August 7. More bids might emerge at 99.24 the low from August 3.
Barclays Share Daily Chart