Market Report: Banks take a battering as investors fret over new financial crisis threat

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The sell-off of banking stocks accelerated on Wednesday as all the big, High Street lenders languished at the bottom of the blue-chip ladder.

More than £42 billion has been wiped off the value of the FTSE 100 banks this year amid a sector-wide exodus.

Most of them have fallen more than 20% since the New Year, with investors concerned that we are on the verge of another global financial crisis.

Traders suggested the new lows may have triggered so-called “stop-losses”, limiting a loss on a falling stock and which activate automatic selling.

Barclays was worst off today, 5.35p cheaper at 168.4p, with taxpayer-backed Royal Bank of Scotland nipping at its heels, down 5.8p at 234.7p, and Asia-focused banks HSBC and Standard Chartered 10.45p lower at 457.15p and 8.75p cheaper at  457.15p respectively. 

Bucking the trend was Clydesdale Bank, now known as CYBG, which after a day’s delay managed to float its shares. Having been priced at 180p, the lower end of guidance, the stock began up 3.75p at 183.75p.

The banking slide weighed on the FTSE 100, which dropped 26.55 to 5895.46 after a slump on Wall Street and also in Japan, with jitters about China’s growth lingering in traders’ minds.

Investors hung up on Vodafone, which fell 3.85p to 217.7p, expressing disappointment that the talks with John Malone’s Liberty Global were not about a bigger European asset-swap deal. 

Ocado, off 9p at 236.2p, was the worst performer on the mid-cap index as a wave of broker downgrades hit the grocery-delivery firm on concerns about lack of clarity over its delayed first overseas deal. Jefferies slashed its target price to 265p, suggesting that without an international presence the shares would be worth less than 200p.


Ocado is yet to announce an international partner (Picture: Ocado)

Investors were relieved when profit warning-prone HSS Hire, one of the worst floats of 2015, left full-year guidance unchanged. The tool-hire firm’s shares were flat at 79p, some way below the 210p IPO price a year ago.

A profit warning knocked Shanks down 3.75p to 83.25p as the waste-management system revealed “challenging conditions” would lead to worse-than-expected annual results. 

Local-paper group Johnston Press enjoyed its best day for three years, up by 4.97p, or 14%, to 41.47p as the company confirmed plans to cut its pension deficit by £50 million.

Meanwhile, spoken-word content site Audioboom lost early gains to trade just 0.07p higher at 3.57p after being chosen as a partner for Google Play in the US.

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February 4, 2016 |
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