Investors’ favourite? Only FTSE 100 share below 100p gains 36% in 2021

HIGHLIGHTS

• Major bankers have considerably supported FTSE 100 in 2021
• The only FTSE 100 share priced below 100p has gained 36%
• Market cap leader amid banking stocks has jumped 18% 

Shares of major banking services providers have considerably supported the benchmark FTSE 100 in the present calendar year with the stocks rising up 43% in 2021 so far. With the rally led by major bankers and other heavyweight corporations included in the 101-constituent heavy market index, FTSE stands with a year-to-date (YTD) return of a little more than 12% even as repetitive disruptions on the back of Covid-19 pandemic triggered a number of moderate-to-major corrections with the recent declines coming after the massive emergence of the Omicron variant.

London equities have been hammered so badly that FTSE 100 has not managed to breach the pre-Covid peaks, while the European peers including the DAX of Germany, CAC 40 France, FTSE MIB of Italy, SMI Swiss of Switzerland, along with the leading Wall Street stock averages namingly NYSE-controlled Dow Jones Industrial Average, the tech leader Nasdaq Composite and the broader benchmark S&P 500 have comfortably surpassed the pre-pandemic highs, effectively registering fresh record highs.

The persisting pandemic challenges alongside the consequential impact of Brexit has categorically dismayed the prospective rise in the leading stock indicator. The highly anticipated notion of FTSE 100 breaching the psychological level of 7,500 in the remainder of 2021 has been faded away following the Omicron-steered anxiousness, reintroduction of mask mandate, record high number of daily infections since the beginning of pandemic and the unforeseen repercussions of faced by the enterprises operating within the hospitality and leisure sectors.

The banking heavyweights have largely risen in 2021 so far, effectively boosting the index, partly counterbalancing the negative points provided by a bunch of blue-chip stocks. Shares of Lloyds Banking Group (LON: LLOY), the only FTSE 100 component priced below 100p, have amassed an impressive gain of around 36% in the current year, vastly outperforming the benchmark index and three banking peers including in the prestigious index.

According to the historical data available with the London Stock Exchange, the stock of Lloyds Banking Group has climbed as much as 36.85% to GBX 47.68 from the share price level of GBX 34.84 apiece, as on 4 January, the first trading day of this year.

Lloyds Banking Group (YTD performance)

Source: REFINITIV

Image description: YTD performance of Lloyds Banking Group shares

In the meantime, other FTSE 100 banking peers including Barclays (LON: BARC) and NatWest Group (LON: NWG) have risen 31% and 43%, respectively. The leading banking stock in FTSE 100, according to the market capitalisation, HSBC Holdings (LON: HSBA) rose a little more than 18%, while the banking share with the least stock market value, among the banking components of FTSE 100, Standard Chartered (LON: STAN) has declined nearly 5%.

Shares of Lloyds Banking are poised to finish the present calendar year on a higher note, supported by the revival in earnings, unlike the previous year’s subdued end when the stock registered a yearly drop of 42%. In the corresponding stretch, the domestic headline barometer witnessed a fall of 14%, making it one of the worst years for UK shares since 2008, the year when the subprime mortgage crisis shook world markets.

In the nine months to 30 September 2021, Lloyds Banking Group recognised a profit after tax of £4,962 million, even as net earnings for the group slipped by £162 million, or 1% to £11,072 million. The group said its net interest income declined by 1% to £8,249 million in the nine-month period from January to September of 2021, as against a net interest income of £8,326 million realised in the similar stretch of previous year.