Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
London close: Stocks drop as banking sentiment falls again
(Sharecast News) - London's stock market closed in negative territory on Thursday, as initial relief over the rescue of US bank First Republic faded, and Credit Suisse faced further troubles. The FTSE 100 was down 1.01% to 7,335.40 and the FTSE 250 declined 1.53% to 18,470.83.
On Thursday, 11 major US banks deposited $30bn with First Republic Bank, in a bid to show their support and maintain confidence in the country's banking system.
The banks involved included Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, BNY Mellon, PNC Bank, State Street, Truist, and US Bank.
In a joint statement, the banks emphasised the importance of supporting smaller- and medium-sized banks, which create millions of jobs and contribute to the local economy.
However, the positive sentiment was short-lived as Credit Suisse shares continued to slide following news of a lawsuit filed against the bank by the Rosen Law Firm.
The lawsuit alleged that Credit Suisse made "materially false and misleading statements" in its 2021 annual report, thereby overstating its financial prospects to shareholders.
"Hopes that the banking crisis would continue to fade have themselves grown weaker, as stocks fell again, reversing much of yesterday's move higher," said IG chief market analyst Chris Beauchamp.
"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."
In currency markets, sterling gained 0.55% against the dollar to last trade at $1.2176, while it was nearly flat against the euro, declining a marginal 0.01% to €1.1413.
UK economy alone in G7 on predicted economic contraction
In economic news, the OECD projected that the UK economy would contract by 0.2% in 2023, making it the only industrialised nation besides Russia to experience negative growth this year.
The revised estimate was an improvement from the previous forecast of a 0.4% contraction, but it still ranked the UK last among the G7 countries.
The OECD said it anticipated a "mild rebound" in 2024, with growth of 0.9%.
Comparatively, the US and Japan were projected to grow by 1.5% and 1.4% this year, while Germany was expected to see a 0.3% growth.
Russia's economy was expected to contract by 2.5%.
In the eurozone, meanwhile, annual inflation slightly decreased to 8.5% in February, down from 8.6% in January.
While energy inflation decreased, food, alcohol, and tobacco inflation increased to 15%.
Core inflation rose by 0.3 percentage points to 5.6%, according to Eurostat data.
"Today's print lends support to yesterday's decision of the ECB to continue tightening monetary policy despite the ongoing turbulence in financial markets," noted analysts at Oxford Economics.
"Although we do not think that the council will fully sidestep the issue of the impact of higher rates on financial stability, it is more likely to use liquidity measures to address this risk.
"Hence, we see little chance of a meaningful pivot before there are clear signs of core inflation abating."
Across the pond, US industrial output remained stagnant in February due to weakness in the mining sector.
The US Department of Commerce reported a 0.6% decline in mining production, while manufacturing and utilities increased by 0.1% and 0.5%, respectively.
Year-on-year, manufacturing output fell by 1.0%.
Still stateside, the University of Michigan's preliminary consumer confidence index for March revealed growing pessimism among Americans, primarily due to persistently high prices.
The index dropped from 67.0 in February to 63.4 in early March, contrary to expectations for it to remain unchanged.
Finally, the People's Bank of China announced a 25-basis point reduction in the reserve requirement ratio (RRR) for all banks, excluding those with a 5% ratio, effective from 27 March.
The decision, aimed at boosting liquidity in the banking sector, marked the first RRR cut of the year and came earlier than anticipated, following a similar cut in December.
The central bank said it was intended to support the economy through precise and forceful policies, ensuring sufficient liquidity and reduced funding costs for businesses.
Bodycote surges as some miners hold on to gains
On London's equity markets, select mining companies retained their gains, with Anglo American and Glencore seeing increases of 1.01% and 2.23%, respectively, following an earlier surge in metal prices.
Bodycote shares jumped 5.85% after the company reported a significant increase in full-year profit and revenue, as well as an enhanced dividend.
The firm said permanent price increases had fully offset labour and general cost inflation.
Diploma's stock value rose by 3.19% after the company raised around £235m in a placing to help fund the acquisition of US-based Tennessee Industrial Electronics.
Pharmaceutical company GSK saw a 0.99% increase after an upgrade to 'buy' from 'hold' by Deutsche Bank, while the London Stock Exchange Group had a 1.97% boost after an upgrade to 'buy' at UBS.
On the downside, BT Group's stock dropped 6.07% as its Openreach business announced it would postpone the launch of its Equinox 2 pricing deal.
The decision followed a two-month delay by Ofcom in concluding its investigation into a new Openreach broadband pricing plan.
Finally, Sage Group's shares fell 2.6% after a downgrade to 'neutral' at Exane.
Reporting by Josh White for Sharecast.com.
Market Movers
FTSE 100 (UKX) 7,335.40 -1.01% FTSE 250 (MCX) 18,470.83 -1.53% techMARK (TASX) 4,457.64 -1.31%
FTSE 100 - Risers
Endeavour Mining (EDV) 1,760.00p 2.44% Glencore (GLEN) 432.65p 2.23% London Stock Exchange Group (LSEG) 7,470.00p 1.97% Fresnillo (FRES) 710.00p 1.75% Imperial Brands (IMB) 1,884.50p 1.18% Anglo American (AAL) 2,504.00p 1.01% GSK (GSK) 1,400.80p 0.99% Compass Group (CPG) 1,941.00p 0.75% Shell (SHEL) 2,214.00p 0.23% DCC (CDI) (DCC) 4,290.00p 0.05%
FTSE 100 - Fallers
BT Group (BT.A) 137.75p -6.07% Abrdn (ABDN) 199.30p -5.55% Hiscox Limited (DI) (HSX) 1,042.00p -4.84% Ocado Group (OCDO) 416.10p -4.48% Rolls-Royce Holdings (RR.) 140.30p -4.10% Prudential (PRU) 1,008.00p -3.95% Smurfit Kappa Group (CDI) (SKG) 2,827.00p -3.52% Legal & General Group (LGEN) 226.60p -3.33% Melrose Industries (MRO) 147.30p -3.19% Aviva (AV.) 402.20p -3.08%
FTSE 250 - Risers
Bodycote (BOY) 615.50p 5.85% W.A.G Payment Solutions (WPS) 82.40p 4.82% Diploma (DPLM) 2,720.00p 3.19% Marshalls (MSLH) 310.80p 2.98% Herald Investment Trust (HRI) 1,786.00p 2.88% Auction Technology Group (ATG) 646.00p 2.54% Baltic Classifieds Group (BCG) 155.00p 2.51% TP Icap Group (TCAP) 171.00p 2.46% Diversified Energy Company (DEC) 93.00p 2.37% Genuit Group (GEN) 271.00p 1.88%
FTSE 250 - Fallers
Bridgepoint Group (Reg S) (BPT) 193.70p -10.07% Currys (CURY) 59.25p -8.78% 888 Holdings (DI) (888) 58.85p -8.05% TI Fluid Systems (TIFS) 93.60p -7.51% ASOS (ASC) 737.50p -7.47% Moonpig Group (MOON) 108.10p -7.37% Shaftesbury Capital (SHC) 111.00p -7.04% OSB Group (OSB) 489.60p -5.85% Intermediate Capital Group (ICP) 1,154.00p -5.82% TUI AG Reg Shs (DI) (TUI) 1,387.50p -5.68%
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.