Market report

London stocks hit | Phoenix, Direct Line squeezed


4.30pm: London plunges but US higher despite bank falls

London’s blue chip index closed 199.72 points (2.58%) lower at 7,548.63 as tensions continued to surround the banking sector.

The sale of SVBUK and support for its parent in the US was not enough to halt fears of contagion.

Wall Street opened higher after US regulators stepped in to protect depositors at SVB and Signature Bank as it is though the demise of the two tech-focused banks makes it less likely that the Federal Reserve will pursue a hawkish agenda on interest rates.

However, the realisation that regulatory action isn’t stopping the rot has led to sharp falls among the biggest banking names such as Wells Fargo down 7.5%, Citigroup down 6%, and Bank of America down 7%.

In London, banks were among the biggest fallers. Standard Chartered was down 6.7%, Barclays by 5.9% and NatWest by 4.8%. Full story here

Direct Line was down 7% to 154p after seeing a slump in profits followed what it called “a tough year.”

Operating profit for the 12 months to 31 December plunged 95% to £32.1m from £590.3m reflecting higher motor claims inflation, higher than expected weather event claims, new regulatory changes and challenging investment markets.

The dividend for the year will be cut by 67% to 7.6p from 22.7p as previously announced..

Acting CEO, Jon Greenwood, said: “We have taken pricing actions that will support restoration of margins in Motor and mitigate the impact of further claims inflation. We have also accelerated a range of other actions including deploying additional resources in Motor.”


Standard Life house

Phoenix Group, the savings and retirement company, saw its assets under administration fall to £259bn from £310bn last year, with £46bn in value lost through market turmoil.

It posted a loss before tax attributable to owners of £2.26 billion, wider than the previous year’s loss of £688 million.

Full story here

Springfield CFO resigns

Elgin-based Springfield Properties has announced the resignation of Michelle Motion as chief financial officer and a director of the company with immediate effect.

The board has begun a search for a new CFO and will update the market in due course.

Full story here

Global markets

Today’s sale of Silicon Valley Bank UK to HSBC has thrown forecasts into a spin and traders nerves may be steadied by the assurances given by the Bank of England and Treasury.

Overnight in Asia, equities are higher following the bank interventions The Hang Seng was up 2.26%. 

Wall Street was hit by the bank’s collapse on Thursday and New York ended lower on Friday, with the Dow Jones Industrial Average down 1.1%, the S&P 500 down 1.5% and the Nasdaq Composite down 1.8%.

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