Source: Sharecast
The FTSE 100 closed down 0.9% at 9,354.57.
Sentiment took a hit as shares of regional banks Zions Bancorp and Western Alliance tumbled on Thursday after they said they had been victims of fraud on loans to funds that invest in distressed commercial mortgages.
Zions Bancorp said it would take a $50m charge-off related to a loan issued by its California Bank & Trust division, while Western Alliance said it had begun legal proceedings over a bad loan.
Russ Mould, investment director at AJ Bell, said: "Pockets of the US banking sector including regional banks have given the market cause for concern. Investors have started to question why there have been a plethora of issues in a short space of time and whether this points to poor risk management and loose lending standards. This includes Zions flagging an unexpected loss on two loans and Western Alliance alleging a borrower had committed fraud.
"The pullback in UK-listed banks will be sentiment-driven. Investors have been spooked and moved to trim positions in the sector, possibly opting to have lower exposure in case a crisis is brewing. There is no evidence of any issues with the London-listed core banking names, but investors often have a knee-jerk reaction when problems appear anywhere in the sector.
"However, investors are watching one London-listed name in the broader financials sector very closely. ICG, formerly called Intermediate Capital Group, was the biggest faller on the FTSE 100 as it has exposure to private credit and asset-backed finance."
Stocks ended off their lows, however, after Donald Trump said that his proposed 100% tariff on goods from China would not be sustainable.
Speaking to Fox Business, he also said that his meeting with Chinese president Xi Jinping in two weeks was set to go ahead and that "things will be fine with China".
In equity markets, precious metals miner Fresnillo and gold miners Endeavour and Hochschild all slid as gold prices fell back after Trump’s remarks on China.
Private equity investment firm ICG, Barclays, Schroders, Standard Chartered, NatWest, Lloyds and HSBC all fell amid concerns about US regional banks.
On the upside, Pearson rallied as the educational publisher forecast a pick-up in fourth-quarter sales, leaving it on track to meet full-year guidance. Updating on trading, Pearson said underlying sales had grown 4% in third quarter, helping lift revenues in the year-to-date by 2%.
Pearson said it had been a quarter of "good progress", with robust performances across all its businesses.
Engineer Smiths Group edged up after saying late on Thursday that it had agreed to sell Smiths Interconnect to Molex, a Koch company, for an enterprise value of £1.3bn.
Man Group also gained after the fund manager reported a solid increase in assets under management, as investment performance gains picked up sharply from the first half.
Market Movers
FTSE 100 (UKX) 9,354.57 -0.86%
FTSE 250 (MCX) 21,794.79 -0.89%
techMARK (TASX) 5,501.26 -0.85%
FTSE 100 - Risers
Pearson (PSON) 1,119.50p 2.33%
Haleon (HLN) 351.80p 1.94%
Reckitt Benckiser Group (RKT) 5,910.00p 1.83%
Coca-Cola HBC AG (CDI) (CCH) 3,556.00p 1.77%
Smiths Group (SMIN) 2,406.00p 1.69%
Unilever (ULVR) 4,665.00p 1.63%
Burberry Group (BRBY) 1,215.00p 1.59%
BT Group (BT.A) 184.50p 1.37%
Diageo (DGE) 1,826.50p 1.36%
Vodafone Group (VOD) 86.98p 1.14%
FTSE 100 - Fallers
Fresnillo (FRES) 2,352.00p -10.50%
ICG (ICG) 1,926.00p -5.68%
Barclays (BARC) 357.80p -5.66%
Antofagasta (ANTO) 2,663.00p -4.45%
BAE Systems (BA.) 1,831.50p -4.01%
Schroders (SDR) 374.20p -4.00%
Melrose Industries (MRO) 592.40p -3.99%
International Consolidated Airlines Group SA (CDI) (IAG) 391.20p -3.72%
Standard Chartered (STAN) 1,377.50p -3.54%
Anglo American (AAL) 2,834.00p -3.44%
FTSE 250 - Risers
Man Group (EMG) 199.90p 6.39%
Wizz Air Holdings (WIZZ) 1,168.00p 1.92%
Domino's Pizza Group (DOM) 189.70p 1.61%
Tate & Lyle (TATE) 382.60p 1.59%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 299.50p 1.53%
THG (THG) 43.54p 1.26%
Barr (A.G.) (BAG) 686.00p 1.18%
Genus (GNS) 2,720.00p 1.12%
Pantheon Infrastructure (PINT) 102.00p 0.99%
Morgan Advanced Materials (MGAM) 198.00p 0.92%
FTSE 250 - Fallers
Endeavour Mining (EDV) 3,346.00p -5.75%
Hochschild Mining (HOC) 417.00p -5.49%
Oxford Biomedica (OXB) 588.00p -4.70%
Chemring Group (CHG) 530.00p -4.50%
TBC Bank Group (TBCG) 4,115.00p -4.30%
BlackRock World Mining Trust (BRWM) 667.00p -4.17%
Lion Finance Group (BGEO) 7,380.00p -3.72%
Edinburgh Worldwide Inv Trust (EWI) 200.00p -3.38%
AJ Bell (AJB) 525.00p -3.14%
International Personal Finance (IPF) 207.00p -3.04%
