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Banking Bloodbath Leaves Investors Feeling Foolish At Start Of April

Published 01/04/2020, 09:57
Updated 21/10/2020, 09:15

A new month, and quarter, saw Europe resume its losses, a wave of dividend-cancelling updates from the banking sector proving to be no April Fools for investors.

With all the big banking boys suspending dividends, share buybacks and the like, investors were dealt another reminder of the economic impact of the coronavirus. The banking shares themselves suffered the most: at the lower end of the spectrum RBS (LON:RBS) was down just over 5%, while at the upper end HSBC plunged 8%.

The commodity sector fared no better. As Brent Crude and copper fell 4.2% and 2.4% respectively, the oil and mining stocks almost matched their banking peers, with losses ranging from 3.3% to 6.7%.

Unsurprisingly, then, with its top tier components in disarray, the FTSE lurched 4% lower as Wednesday got underway, sending the index back under 5450. For reference, at one point on Tuesday it crossed 5700.

There was no let-up in the Europe, where the DAX, faced with a 6.1% slide from Deutsche Bank (DE:DBKGn), fell 525 points. Meanwhile, with Societe Generale (PA:SOGN), BNP Paribas (PA:BNPP) and Credit Agricole (PA:CAGR) all down 4.5-5.5%, the CAC shed 175 points.

A better than forecast Chinese Caixin manufacturing PMI failed to help investors, ditto beats for German retail sales and the Spanish manufacturing sector.

As for what is to come, the final UK manufacturing PMI for March is expected to be cut to 47.1 from the flash estimate of 48.0.

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