The FTSE 100 plummeted well below 6,000 in early trading on Monday as investors became increasingly concerned about the rising possibility of a second national lockdown.
The Government’s chief medical officer Professor Chris Whitty is set to warn later this morning that the UK is at a ‘critical point’ in the coronavirus pandemic and that the country is currently ‘heading in the wrong direction’.
It comes after multiple reports over the weekend suggested Prime Minister Boris Johnson is mulling over plans for a two-week mini-lockdown in England to curb the spread of the virus, with Chancellor Rishi Sunak reportedly against the idea over concerns for the economy.
By 8.30am, the UK’s leading basket of stocks fell 2% to 5,888, with banks also weighing on the benchmark index following a big leak of secret documents which focused on suspicious transactions.
It was a different story for some stock markets elsewhere in the world, particularly in Japan where the benchmark Nikkei 225 rose 0.18% in afternoon trading, though China’s Shanghai Composite was down 0.63% and the Hang Seng in Hong Kong tumbling 1.85%.
HSBC HITS 25-YEAR LOW
Weighing on the Hang Seng, and the FTSE, was multinational banking giant HSBC (HSBA), with its London shares down 3.7% to 292p, a 25-year low, on reports of alleged suspicious money transfers.
According to the FinCEN files, a leak of over 2,000 documents which focus on suspicious activity reports submitted by banks to the US authorities, some of the world’s largest banks including HSBC reportedly moved large sums of allegedly illicit funds over nearly two decades.
In 2012, HSBC agreed to pay a $1.9 billion settlement after failing to prevent Mexican drug cartels from using the bank to launder hundreds of millions of dollars.
OTHER BANKS ALSO AFFECTED
HSBC wasn’t the only one affected by the FinCEN files. Investment bank Standard Chartered (STAN) fell 3.4% to 347p after it was reportedly named in the leaked files.
Barclays (BARC) dropped even further, with its shares down 6.4% to 91.2p. The BBC reported that the FinCEN files suggest one of Vladimir Putin’s closest friends may have used Barclays in London to launder money and dodge sanctions. The BBC cited Barclays as saying it met all its legal and regulatory duties.
Lloyds (LLOY) was also a big faller, tumbling 5.8% to 23.7p as sentiment waned towards the sector and also how banks might be hit by potentially tighter lockdown measures in the UK.
In corporate news, security company and takeover target G4S (GFS) slipped 1.8% to 190.1p, as it said its underlying earnings were now ahead for the first eight months of 2020 year-on-year, following a ‘strong’ first half performance.
G4S said its revenue was 1.9% lower overall, though this was more than offset by cost control and reduced interest expenses.
Pharmaceutical company AstraZeneca (AZN) fell 0.5% to £87.04 despite revealing positive trial results for a lung cancer treatment.
Separately, AstraZeneca said it and partner Merck had received marketing authorisation in the European Union for a treatment for prostate cancer and ovarian cancer.
Publisher and events group Informa (INF) gained 0.7% to 383.4p even as it posted a deep first-half loss due to event cancellations.
For the six months to 30 June, pre-tax losses were £801.2 million, compared with a loss of £232.8m in the same period a year ago, as revenue fell 42.1% to £814.4 million.
Informa said it had extended delays of events into mid-to-late spring next year to soften the impact from the pandemic, a move that was expected to help strengthen its balance sheet.
Music rights investor Hipgnosis Songs Fund (SONG) dropped 5% to 119.7p as it launched a £254 million share issue to fund the acquisition of more song catalogues.
New shares in the company were being offered at 116p each, a 7.9% discount to the Hipgnosis closing price on Friday.
Bus and rail company FirstGroup (FGP) reversed 3.1% to 41.4p, even as the UK government extended an emergency funding arrangements for the rail industry.
Fashion retailer Superdry (SDRY) sank 11% to 135.2p, having posted a deeper annual loss after the coronavirus pandemic hampered its turnaround efforts. Pre-tax losses for the year to 25 April amounted to £166.9 million, compared to a loss of £89.3 million the previous year, as revenue slumped 19% to £704.4 million.
Superdry said trading had improved as social distancing measures were relaxed. Even so, revenue in the seven weeks to 12 September was down 31%, while revenue in the 20 weeks to 12 September was down 27%.