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.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

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

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

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.