London markets lose earlier gains as jitters return to banking sector
When markets closed, earlier gains had been reversed and London’s top index had shed nearly 75 points, or 1%.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The flurry of optimism in London markets on Friday morning after a 30 billion dollar (£25 billion) cash injection into a struggling US bank dissipated towards the afternoon as global markets continue to feel the fallout from a series of failures.
The FTSE 100 had initially gained exactly 100 points in the early hours of trading on Friday morning.
It came as a series of US banking giants got together to pour cash into First Republic Bank – another mid-sized US lender that had been struggling in recent days.
But by mid-afternoon the gains had been reversed and London’s top index was instead trading down by exactly 100 points – a drop of around 1.3%.
When markets closed, it had shed nearly 75 points, or 1%, to 7,335.
It came as First Republic’s share price began to slide again when markets opened in the US. Shares dropped by around a quarter.
Credit Suisse – the Swiss banking giant which has also been struggling – was also down, by 10%.
The bank was given £45 billion by the Swiss central bank to help it keep running earlier this week.
It meant that all the gains that the FTSE 100 made on Thursday were wiped out, while markets in the US and Europe were also heavily in the red.
First Republic’s shares had cratered by nearly three quarters in just a week as it reverberated from the failure of three other banks in the US and the weakness in Credit Suisse.
On Thursday evening, JP Morgan Chase, Citigroup and other major US players deposited 30 billion US dollars (£25 billion) into the struggling lender.
Chris Beauchamp, chief market analyst at online trading platform IG, said: “Hopes that the banking crisis would continue to fade have themselves grown weaker, as stocks fell again, reversing much of yesterday’s move higher.
“Credit Suisse continues to be the bugbear for Europe, while in the US First Republic worries are still the main driver of losses.
“This week has been a liquidity crisis, but it seems that the moves by authorities to remedy the situation have not completely reassured wary investors.”