FTSE 100 Live: HSBC acquires Silicon Valley Bank UK, lowest FTSE close of 2023


Unemployment statistics to adjacent tomorrow

The ONS will release its monthly activity market statistics tomorrow, including the unemployment rate, which serve as a guage of the effect that interest rate tightening is having on the wider economy.

In February, the seasonally adjusted unemployment rate was 3.7%.

Elsewhere, companies reporting financial results include Yu Energy, Close Brothers and Virgin Wines.


FTSE has lowest close of 2023

The FTSE 100 closed at 7548.63 today, which is the lowest stay-of-day figure of the year.

The fallout from the collapse of Silicon Valley Bank hit banking stocks and the wider financial sector, despite HSBC’s deal to acquire the collapsed bank’s UK arm this morning.

The index of blue-chip companies continued to decline for much of the morning and never seriously rallied, finishing on its lowest point of the day. The FTSE was down by just short of 200 points, or 2.6%, for the day, to 7548.63, which was below the previously yearly low of 7554.09, set on the first trading day of the year.

The index is now down by 4.2% in just two days.


Pound rises towards $1.22

The pound has risen by almost 1% against the dollaer today, now buying $1.216..

The pound had been hovering around the $1.20 impress for recent weeks, but has now risen to just short of a monthly high as the dollar dipped against all considerable currencies.


US treasury yields drop below 4%

The yield on three-year US treasury notes has fallen below 4%, after dropping by almost 50 basis points.

The yield on three-year notes fell to 3.876%, having started the day at 4.303%, after having fallen from 4.566% on Friday, suggesting lower investor confidence.


US stocks rise in opening half-hour

Shares of US companies gain risen this morning, though a number of regional banks faced considerable declines.

The S&P 500 is up 0.6% to 3885.75, while the Dow Jones is up 0.8% to 32151.16 and the Nasdaq is up 0.9% to 11237.96, after the the FDIC’s decision to construct Silicon Valley Bank deposit holders whole.

However, aspects of the banking sector continue to face anxiety. First Republic Bank has been the biggest loser on the S&P 500, with shares down 73.3% today, amid concerns over its own future.


SVB is a victim of the US Federal Reserve’s obsession with inflation

“The bank failures in the US over the past several days are a stark reminder that the fight against inflation can adjacent at a high cost,” Daniel Pinto writes.

“It was naive on the section of the Federal Reserve to imagine that it could seize interest rates from zero to 4.75% in less than a year without creating mayhem: bankruptcies in the financial sector, a brutal dearth of funding for technology companies and more generally for the highest growth and most promising sectors of the economy, considerable strains in the real estate market and, last but not least, a looming public finance crisis.

“Most governments gain borrowed heavily to support their economies during Covid and now find themselves in the untenable situation of having to pay ever higher interest rates to service this debt.

“Where will the money adjacent from if the private sector slows down and banks struggle to play their vital role supporting economic activity?”

Read more here


Why did Silicon Valley Bank collapse?

Outside tech circles, Silicon Valley Bank was relatively unknown in the UK. Now, its brand is on the lips of almost everyone in business after its sudden collapse – and the swift rescue of its depositors – followed a weekend of high drama.

A wave of dread swept global financial institutions on Friday night, moving into a weekend of crisis talks involving chancellor Jeremy Hunt, Prime Minister Rishi Sunak and the governor of the Bank of England, Andrew Bailey.

Why did Silicon Valley Bank collapse? And how did HSBC rescue its UK arm?


US regional banks hit hard in premarket trading

considerable US stock indices are expected to dip from Friday’s close when they open this morning, the outlook could be tougher for regional banks.

Shares in regional bank First Republic Bank are down by more than 60% in premarket trading, while in Texas-based Comerica’s shares are down almost 20%, while Ohio-based KeyCorp is down more than 11%. Wealth administration business Charles Schwab and SunTrust owner Truist are also down more than 6%.


Midday movers

There were many more fallers than risers on the FTSE 100 this morning, with miners providing the main exception to the downward trend in the market in the wake of Silicon Valley Bank UK’s rescue deal.

Endeavour Mining was the top riser of the day, as the only company with shares up by more than 2%. Many of the biggest fallers, meanwhile, were banks or financial services busnesses, but Standard Chartered was joined by grocery delivery company Ocado and manufacturing company Melrose Industries in the bottom three.


SVB UK to resume operations today

Silicon Valley Bank UK has announced that it will resume its normal operations today, after HSBC acquired the collapsed bank for £1.

The bank said that clients shouldn’t notice any considerable changes to operations, but there may be delays in certain areas.