The FTSE 100 suffered its worst day of trading since the start of the COVID-19 pandemic, as the Chancellor’s spring budget was fueled by turmoil in financial markets.
London’s top index tumbled over fresh fears over the health of the global banking sector, falling more than 300 points at one point on Wednesday afternoon.
Insurance giant Prudential fell more than 12% and British bank Barclays fell more than 8%.
Energy firms Shell and BP also saw losses of around 8% on the day Chancellor Jeremy Hunt promised to extend the energy price guarantee for another three months.
The FTSE 100 closed down 292.66 points, or 3.83%, at 7,344.45.
The sale of financial shares was initiated by Credit Suisse, which has seen its shares hit repeated lows in recent weeks.
It marked a huge one-day drop from the day after September’s mini-budget and the day Russia launched a full-scale invasion of Ukraine in February.
Some analysts said investors were starting to panic after a massive selloff of shares in top European banks, Credit Suisse.
Its shares fell by more than a quarter during the day, prompting them to be temporarily suspended.
Fawad Razakzada, market analyst at CitiIndex and Forex, said: “The sell-off in financial stocks was triggered by Credit Suisse, which has seen its shares hit bottom repeatedly in recent weeks.
“The lender’s largest shareholder, Saudi National Bank, announced that it cannot increase its stake in the crisis-hit Swiss bank to more than 10% due to regulatory issues.
Worried about another bank failure, traders heavily sold shares of European banks. Barclays, Deutsche Bank, BNP Paribas and Societe Generale were each showing losses of about 8% to 10% as investors piled on the Swiss lender’s own assets. Worried about the risk.
It was an equally bleak day for other European markets, which were hit by a sharp selloff in banking stocks. The French CAC was down 3.58% and the German DAX fell 3.27%.
American stock markets also started the day’s trading in the red mark. The S&P 500 was down 1.5% and the Dow Jones was down 1.8% at the European market close.
The miserable session coincided with Budget Day in the UK, which unveiled sweeping state-funded childcare reforms and tax breaks for businesses aimed at boosting economic growth.
The pound fell back against the US dollar throughout the afternoon, and was down 1.2% to $1.2013 at the European market close.
In company news, insurer Prudential sank to the bottom of the FTSE 100 despite reporting an 8% rise in its annual earnings and feeling optimistic on China reopening its borders.
Yet its share price fell more than 10% amid shaky investor confidence in the broader financial sector.
Meanwhile, Trainline revealed that it had lost up to £6 million in one day during strike action on UK railways, on the same day London was hit by a 24-hour joint strike by tube drivers and station staff.
The online rail ticketing business said it made record net ticket sales last year but admitted it suffered losses as a result of industrial action.
Nevertheless, its share price increased by 1.4%.
Elsewhere, Harry Potter publisher Bloomsbury enjoyed a boost in its share price after it said people were increasingly looking to reading as an “affordable pastime” during the cost-of-living crisis.
The firm upgraded its full-year profit outlook, and its shares were up 6.4%.
The biggest risers on the FTSE 100 were United Utilities, up 10p to 1,053.5p, Haleon, up 3p to 318.5p, Unite Group, up 4p to 940.5p, Segro, up 2.4p to 782.6p, and Fresnillo, up 1p to 737.6p. .
The biggest losers on the FTSE 100 were Prudential, down 147.0p to 1,036p, Glencore, down 49.5p to 412p, Barclays, down 13.8p to 138.24p, Shell, down 210.0p to 2,259.5p and BP, down 44.0p. 486.8p.
Credit: www.standard.co.uk /