NatWest Share Price Drags FTSE 100 Index as Heavyweights Spark Contagion Fears

NatWest share price was trading in the red on Friday, dragging UK’s benchmark FTSE 100 index. NatWest led the losses in the index as other banking stocks, such as Standard Chartered, Barclays, Prudential, Intermediate Capital, HSBC, and Lloyds, followed suit. The NWG stock price has slipped by more than 9% in the past three days, while its year-to-date price dropped by 4.31%.

Troubled Banks

NatWest share price was trading lower on Friday, its third consecutive drop after signs of recovery in the banking sector. European stock markets slipped on Friday as investors digested a week of central bank rate hikes and the latest news from the banking sector.

The global banking sector has been treading waters as the collapse of two US regional banks this month sparked contagion fears for other lenders. Heavyweights Deutsche Bank and UBS were hit hard on Friday by lingering fears that the worst problems in the sector since 2008 were yet to be dealt with.

German giant Deutsche Bank, fell for the third day, plunging more than 8%, following a sharp jump in the cost of insuring its bonds against the risk of default. The UBS stock price slipped by more than 6%, following the aftermath of its acquisition of its embattled rival Credit Suisse.

Banks led the losses on Thursday, as the sector dropped by 3.3% despite reassurances by the policymakers that the system is stable after its recent volatility. Citigroup downgraded the UK banking sector from “overweight” to “neutral” on the back of the effects of continuous monetary policy tightening.

The Bank of England (BoE) raised its interest rates by 25 basis points to 4.25%, down from 4.00% on Thursday. The move by the BoE was priced in by markets after the UK recorded a jump in inflation to 10.4% for February. The Federal Reserve and the Swiss National Bank also hiked their interest rates this week, following the European Central Bank’s hike last week.

NatWest Share Price Outlook

NatWest share price has been on a steep downtrend for the past few days, plummeting nearly 3% in the past week. At press time, the NWG stock price was trading 5.45% lower at 253.4p. On the daily chart, the stock has remained below the 25-day and 50-day moving averages, as well as the 50-day and 200-day exponential moving averages. Its RSI has moved lower and currently stands 2 points above the oversold region at 32.

Therefore, the NatWest share price is likely to continue falling amid the recent bearish momentum in the banking sector. The next logical support levels will be 240p and 231.5p. On the flip side, a move past the resistance level at 265p might push the price higher to 280p.

NWG Price Chart

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