The banking industry has taken a hammering since the invasion of Ukraine by Russia. Llyods Share price is one such stock that has experienced a drop. Since the beginning of the month, the company’s share price has lost four per cent. In today’s trading session, the Llyods share price is showing signs of resurgence, rising by two per cent.
Looking at the recent UK’s Gilt-edged securities sharp fall that coincided with mortgage rates moving higher, it is highly likely that Llyod share prices will improve. This is because, when the mortgage rates increase, the banking sector is able to make higher gross margins.
However, if the rates increase will result in a drop in housing demands, which may also impact the Llyod bank and squeeze their profits margins. The invasion of Ukraine by Russia has also resulted in financial uncertainty for many households as the UK’s inflation surged to over 7 per cent. The result could mean low housing demands and also result in low profit margins.
However, the recent Llyods decision to close 60 UK branches, and instead move operations online could see the bank saving money. The cutting-cost measures are likely to translate positively to the Llyod share prices and result in a bullish move. The move, however, came as a result of data showing that customers were now preferring banking online to physically visiting a branch.
The daily chart below shows Llyods share price hitting the lower trendline of the descending channel and bouncing upwards. The chart also shows that the past few days have traded in a sideways market. It is also clear that the current prices are trading in a very long-term bearish trend.
Therefore, I expect the prices to continue rising in the next few days. There is a very high likelihood that the prices will hit the upper trend line of the channel. If that happens, then we should expect to see Llyods share price trading above 48p. If the bullish trend will have momentum, then it is likely that the prices may end up trading above 50p, which will be a first in April.
This post was last modified on Apr 15, 2022, 22:08 BST 22:08