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FTSE 100 falls sharply as HSBC buys Silicon Valley Bank UK for £1

FTSE 100 falls sharply as HSBC buys Silicon Valley Bank UK for £1

London’s FTSE 100 index fell further as the collapse of Silicon Valley Bank left banks in the red despite emergency action in the US to protect customers and a rescue deal in the UK.

The top level fell nearly 2% in morning trade on Monday, down 132.2 points at 7616.2, as banks and financial stocks extended share losses seen on Friday.

HSBC’s £1 deal to take over the UK branch of failed Silicon Valley Bank (SVB UK) did not stem a fall in the London market as contagion fears grew.

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The US government took extraordinary steps to prevent a potential banking crisis, taking steps to protect all depositors’ cash following the collapse of California-based SVB last Friday.

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The top of the FTSE 100 fell nearly 2% in morning trade on Monday


It came as the spread began to take hold, with regulators announcing that New York-based Signature Bank had also failed and was being seized on Sunday.

In the UK, banks were little after Friday’s heavy losses, with shares in Standard Chartered falling 4% and Lloyds 4%, while NatWest and HSBC fell 3% each.

Other financial stocks were also caught in the rout, with investment giant M&G down 4% in the FTSE 100 and investment manager Abrdn down 4%, while insurers Aviva, Prudential and Legal & General were similarly bullish. were below

It was a similar picture across Europe, with Germany’s DAX down 1.7% and France’s CAC 40 also down 1.7%.

Neil Wilson, chief markets analyst at, said: “Bank shares declined again as sentiment across the sector remains weak, with major European indices pulling into the red.

“The FTSE 100 is trading below 7,700 and is now down about 5% from its all-time high a month ago.”

He said that while the SVB operated in a niche corner of the market, the coordinated action on both sides of the Atlantic suggested concerns about damaging shockwaves in the global financial system.

He said: “It’s not a real bailout in terms of using the cash to run the bank by buying out the shareholders.

“But does this kind of coordinated intervention indicate that regulators are really concerned about the US banking system? Would they intervene if all was really well elsewhere?”

Susannah Streeter, head of money and markets at Hargreaves Lansdowne, warned that concerns over the long-term consequences of the collapse would remain.

He said: “Worries remain about losses as the era of cheap money comes to an end.

“With minor concerns over the path of a mild recession being replaced by a wall of concern about the looming tech shortage, investors will remain on tenterhooks about the direction of interest rates, so the CPI inflation number in the US this week will be in sharp focus.” Will remain.

But the pound was steady despite the stock market woes, with sterling up 0.4% at 1.21 to the US dollar and largely steady at 1.13 to the euro.

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