Where now for the Lloyds share price as PPI news sends it lower?

Lloyds has suffered after announcing the suspension of its buyback programme due to a spike in PPI claims.

Lloyds suspends buyback programme

The payment protection insurance (PPI) claims saga goes on, as Lloyds is forced to suspend its buyback programme due to another spike in the volume of claims by members of the public. The bank now faces an extra bill of £1.8 billion, up from a previous estimate of £550 million. The news comes off the back of the Royal Bank of Scotland (RBS) and Lloyds both increasing their provisions for PPI, adding around £1.3 billion between them.

The outlook continues to be relatively grim from a technical perspective. Longer term, the share price is still roughly where it was in May 2013. And while it has gained since then, especially when dividends are included, it has been unable to build a steady, upward trend. Sideways price movement has been the norm.

Lloyds share price: technical analysis

Rallies above 65p have proven all but impossible to sustain, and any hope the share price had of building a sustainable uptrend disappeared when the price stalled from mid-2013 onwards. The impending Brexit referendum saw the price head lower, beginning a downtrend that ended in early July 2016. The price traded briefly below 40p, providing an excellent buying opportunity for those brave enough to buy this dip.

But this rally ended at 64p in May 2017, and several attempts to break this level have failed since then. While the end of 2018 saw a decent rally, it too ran out of steam at 64p and the resulting sell-off pushed the shares back towards the low of 2018.

Today’s news confirms the bearish view on Lloyds, and with recent price action keeping it below 50p we have the makings of another leg lower. This would see the December 2018 low of 46.8p tested, but it seems unlikely that the downtrend will stop there.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.