Sharp sell-off in bank stocks expected as jittery markets prepare for fallout from First Republic collapse
All eyes will be on the markets today amid what is expected to be a sharp sell-off in bank stocks around the globe.
In London, traders and bankers spent the weekend assessing exposure to the fallout of First Republic in what was described by some as a ‘marathon.’
Fears are mounting of contagion, which could expose other lenders. While many investors say that this is not a ‘Lehman’s moment’, others believe that other banks could also now be in trouble.
Aftermath: In London, traders and bankers spent the weekend assessing exposure to the fallout of First Republic in what was described by some as a ‘marathon’
Traders are particularly nervous that central banks are continuing to raise rates in a banking crisis. Nevertheless many experts stressed that First Republic’s travails were a delayed reaction to the turmoil in March rather than the opening of a new phase in the crisis.
Analysts anticipate HSBC, Lloyds, Barclays, NatWest and Standard Chartered will all be sold off after having billions wiped off their share prices already this year.
Last week NatWest posted strong profits but investors were disappointed by the deposit figures which showed billions leaving the bank.
Mid-tier lenders such as Metro Bank will also be monitored, as well as challenger banks such as Monzo, Revolut and Starling Bank.
One trader told the Daily Mail: ‘It was a marathon weekend for many in the City. There is real fear going into the first trading session of the week. There will be a lot of nerves.’
