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FTSE loses 2% of its value on Monday AM

ended 20. March 2023

The FTSE 100 lost roughly  2% of its value on Monday morning despite the fact Swiss authorities announced they had secured a rescue deal for Credit Suisse. The index fell by as much as 129 points shortly after the markets opened, led lower by the biggest banks in the country. Standard Chartered saw its shares fall by more than 7% at one point, while Barclays was just under 6% down. Markets in Asia were struggling earlier in the morning, with shares in Hong Kong falling by more than 3% as the banking sector took a battering. It sets global markets up for what might be another challenging week. Any thoughts, send them across ASAP as this story is breaking and will be all over the news today. Is this a sign markets are genuinely worried about contagion?

6 responses from the Newspage community

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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Markets have already recovered most of the initial losses at market open, as investors digest the news from last night. I would expect this week to end with markets significantly up as the steps that central banks have taken sink in and what this means for interest rates now. The probability of rate increases have shrunk massively, and equity markets will bounce on the back of this.
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Wes Wilkes
CEO at IronMarket Wealth
The market reaction today is very much expected. Despite the action of central banks to pull together to provide additional liquidity, market sentiment is already so negative that more action, be it welcomed or required, only adds to the worry. As I write, markets have pulled back some of the early losses but in a week where the US central bank is to meet and announce a probable increase in rates, I expect the markets to maintain this volatility.
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Justin Moy
Managing Director at EHF Mortgages
A perfect example of where confidence drives share prices just as much as any financials - inevitably bank shares will be affected by this lack of confidence within global banking. Still, we have already seen a little bounce in prices as traders wait for the right time to take advantage of their low prices. With money being pulled out of smaller banks, that cash needs to be put somewhere else, and UK banks (we have been reassured by the Bank of England) are in a very good position. Maybe it's a good time to buy?
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Madiha Mouchtak MBA
Founder and Managing Director at Answer Inside (SME Transition, Scale-up and Metaverse Solutions)
Markets getting ready for Another Challenging Week Amid Banking Sector Turmoil.
The collapse of California's Silicon Valley Bank has led to fears of another banking crisis, as other banks in the US and Europe show signs of distress. While there are reasons to be hopeful that a repeat of the 2008 global financial crisis can be avoided, central banks are in a bind between maintaining financial stability and keeping inflation low. Financial markets are waiting to see how the Fed, the Bank of England and European Central Bank will respond with interest rate decisions. With tensions high and risks of a recession increasing, the question remains: will history repeat itself?
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Peter Lowman
Chief Investment Officer at Investment Quorum
Panic has hit the markets in early hours of trading this morning as the fall-out from last week’s banking crisis in America and Europe has reverberated around the world’s stock markets. It appears that support and aid provided so far by the U.S. and European authorities, along with two very large institutions HSBC and UBS has not quelled the anxiety from traders and investors that we might be facing the sequel GFC 2.
As the central banks have defined this morning the overall banking and financial system is robust and is in far better shape than it was back in 2007-2009. However, at that time they weren't fighting inflation at the same time as they were trying to save the banking fraternity.
Clearly, so far this has been bank-specific issues and the actions taken from the authorities has to be applauded for their swift actions.
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Tom Britton
Founding Partner at SyndicateRoom
The continuing volatility combined with reports on the profitability of private markets (https://www.bvca.co.uk/Portals/0/Documents/Research/Industry%20Performance/BVCA-Performance-and-Public-Market-Equivalent-Report-2021.pdf) may turn investors heads to alternatives. While high risk, alternatives like this can smooth out the volatility in a portfolio: our analysis of the UK startup market showed a minimal negative correlation (-.02) with the FTSE 350. It also found that there is consistent year-on-year growth in the UK startup market, of approximately 25%. Startup valuations – long considered to have been inflated excessively - are falling as a result of inflation, meaning that investors to take advantage of relative stability can also capitalise on falling prices, significant tax reliefs, and potentially reap significant returns.