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Banks extend losses as Credit Suisse decline sparks concerns
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Finance Minister Hunt says economy set to avoid recession
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Prudential at the bottom of FTSE 100
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FTSE 100 down 3.8%, FTSE 250 off 2.6%
(Updates prices to market close; adds comment, details)
By Shashwat Chauhan and Shristi Achar A
March 15 (Reuters) -
London's FTSE 100 recorded its worst day in a year on Wednesday, with Swiss lender Credit Suisse's slide to a record in the aftermath of Silicon Valley Bank's collapse aggravating contagion fears in the banking sector.
The blue-chip FTSE 100 was down 3.8%, its biggest one-day drop day since February 2022, with almost all FTSE 350 sectors trading in the red.
The domestically focussed FTSE 250 midcap index lost
2.6%.
UK banks resumed their brutal selloff after
Tuesday's brief respite, falling 5.6%, after Credit Suisse shares plunged as the bank's largest shareholder said
it would not buy more stake on regulatory grounds.
"It is hard to look past Credit Suisse and the obvious
crisis of confidence," said Craig Erlam, senior market analyst
at Oanda.
"We are no longer talking about a few regional U.S. banks. We are talking about a major European bank and the shock waves are reverberating through the entirety of financial markets today."
Shares of HSBC , Europe's largest lender slid 5%,
while Standard Chartered and Barclays dropped
7.7% and 9.1%, respectively.
Energy shares shed 8.4%, while industrial
miners lost 7.9%, as oil and metal prices fell. Meanwhile, Britain's economy is set to avoid a recession in
2023, but will still contract this year, Finance Minister Jeremy
Hunt said in the budget speech which included measures to speed
up economic growth.
"The UK economy is going to face by all accounts something
that feels a lot like a recession over the course of this year,"
said Luke Bartholomew, senior economist at Abrdn.
Traders are now seeing a 63% chance of the Bank of England
keeping interest rates unchanged at its policy meeting next
week. The FTSE 100 is down 1.4% so far this year after
notching record levels earlier in the year, weighed down by a
global bank rout, mixed economic data from China and fears of
further aggressive tightening from central banks.
Among single stocks, IG Group fell 9.9% after the online trading platform's quarterly active clients fell. Prudential dropped 12.4% despite the Asia-focused insurer reporting an 8% jump in full-year profit. The company's chief financial officer, James Turner, also said the insurer had a $1 million exposure to Silicon Valley Bank, which was "minimal" against a total debt book of $23 billion. The wider life insurance index slumped 9.0%, hitting an over three-month low level. (Reporting by Shashwat Chauhan and Shristi Achar A in Bengaluru; Editing by Shinjini Ganguli and Maju Samuel)
Shristi.AcharA@thomsonreuters.com;))UK hot stocks: and Wall Street: Gilts report: Euro bond report Pan European stock report: Tokyo stocks: HK stocks: Sterling report: Dollar report:
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