The good mood over the massive US stimulus package finally approved by the Senate late Tuesday dissipated this morning and the FTSE again clocked losses, led by banks and British Land.
The standout performer was Meggitt, a firm that normally supplies the aerospace and defence industry and is leading a consortium of British firms in making ventilators for the coronavirus, which rallied 5.6% after the company’s CEO agreed to stay on in his position to lead the firm through the coronavirus crisis.
Banks under pressure
In echoes of the past financial crisis it is becoming clear how fragile banks are to the current volatility in the markets through anecdotal evidence. Dutch bank ABN Amro had to write down $200 million after a major US client incurred significant losses in the market. The phenomenal rescue packages in place in Europe, the UK and the US will go some way to help banks like ABN AMRO buffer some of the losses, but not all. In London, Royal Bank of Scotland is topping the fallers list, declining 6.8%, while HSBC and other banks are following suit with lesser declines.
Oil tracks stock market
Crude oil prices have tracked the stock markets with a little delay over the last 24 hours, bouncing in late trade ahead of the approval of the US stimulus package only to start sliding in synch with stocks once the stimulus received the green light from Senate. A sustained period of such low oil prices will start hurting smaller UK-listed oil producers, particularly those that are not fully hedged.