Proactive Investors - The FTSE 100 is expected to nurse heavy losses at the open after US stocks tumbled hit by big falls in banking share prices.
Spread betting companies are calling London’s lead index down by around 116 points.
The Dow closed Thursday down 542 points, 1.7%, at 32,256, the Nasdaq Composite dropped 238 points, 2.1%, to 11,338 and the S&P 500 declined 74 points, 1.8%, to 3,918. The small-cap Russell 2000 index lost 51 points, 2.7%, to 1,828.
The S&P financial sector fell about 4%, its worst day since June 2020. Shares of SVB Financial slumped 61% after the firm announced a US$1.75 billion stock sale, and Silvergate stock tumbled 30% on news that it’s shutting down operations. Two bigger bellwethers, Bank of America and Wells Fargo, saw shares drop more than 6% each.
Ipek Ozkardeskaya senior analyst at Swissquote Bank noted “a severe rout in banking stocks spoiled what could’ve been a calm session on Thursday.“
“The collapse of Silvergate Capital and a severe rout in SVB stock plunged the banking sector into darkness yesterday. While Silvergate Capital’s fall was mainly crypto-related and didn’t spur worries for the rest of the banking sector, SVB’s plunge fueled fears that the rest of the banks could also experience similar issues.”
Asian markets were also weaker.The Nikkei 225 index in Tokyo closed down 1.7%, after the Bank of Japan left its ultra-easy monetary policy unchanged in Governor Haruhiko Kuroda's last policy-setting meeting. In China, the Shanghai Composite was down 1.1%, while the Hang Seng index in Hong Kong was down 2.5%.
The early focus in London will be the GDP figure for January to see how the UK economy fared at the start of 2023. Panmure Gordon expects growth of 0.2% month-on-month. A trading statement from housebuilder Berkeley is also in the calendar.
Later today US non-farm payrolls figures take centre stage.