Bernanke is passing round the happy pills and everyone gets a share. Or so we thought.
That didn’t last long. At one point Wednesday morning, just one miscreant stock in the FTSE 350 was spoiling the movers boards by falling after the Fed’s 50 basis point present to markets.
But now the loser list is rather better populated. And leading the charge down is Northern Rock…again. Dragging with it Alliance and Leicester…again.
The renewed banking sell-off, which accelerated rapidly with Northern Rock losing as much as 18 per cent at 250p, was sparked by a rumour which sped round the London market shortly before 10am.
The bank, the story ran, had received two expressions of interest from peers willing and able to put it out of it misery. So far so good.
But the sting in this tale was the numbers attached. Lloyds TSB was rumoured to have attached a £2 price tag to their interest – while HBOS came in at £1.
So buyers are looking for a hefty discount to book value, around 379p a share in June according to Credit Suisse, to take the Wreck off investors’ hands.
But amid the carnage, someone was buying – and with that support the stock battled back to 275p. Deutsche Bank on Wednesday morning revealed a 3.6 per cent stake in Northern Rock.
But who is behind it? There seems few, if any reasons, for any potential bidder to buy in the market, and there’s surely no need to bolster positions ahead of a bid battle.
Presumably, like Baillie Gifford which earlier disclosed it now had more than 5 per cent of Northern Rock, Deutsche Bank is buying on behalf of clients who think the Wreck is due for a sustainable move higher.