FTSE 100 Live March 13: HSBC acquires Silicon Valley Bank UK, lowest FTSE close of 2023

Unemployment stats coming tomorrow

The ONS is due to release its monthly jobs statistics tomorrow, including the unemployment rate, which will serve as a gauge of the impact that tightening interest rates is having on the broader economy.

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

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

FTSE has lowest closing price of 2023

The FTSE 100 closed today at 7548.63, which is the lowest daily end of the year.

The fallout from the collapse of Silicon Valley Bank has hit bank stocks and the broader financial sector, despite HSBC’s agreement this morning to take over the UK arm of the failed bank.

The index of blue chip companies continued to fall for most of the morning and never recovered seriously, ending at its low for the day. The FTSE fell nearly 200 points, or 2.6%, on the day to 7548.63, down from the previous year’s low of 7554.09, set on the first trading day of the year.

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

Pound rises to $1.22

The pound is up almost 1% against the dollar today and has now bought $1.216.

The pound has hovered around the $1.20 mark for the past few weeks but has now risen to a near monthly high as the dollar weakened against all major currencies.

US Treasury yields fall below 4%

The three-year US Treasury yield has slipped below 4% after falling almost 50 basis points.

The three-year note yield fell to 3.876% after starting the day at 4.303% after falling from 4.566% on Friday, suggesting lower investor confidence.

US stocks rise for the first half hour

US corporate stocks are higher this morning, even as a number of regional banks faced sharp falls.

The S&P 500 is up 0.6% to 3,885.75, while the Dow Jones is up 0.8% to 32,151.16 and the Nasdaq is up 0.9% to 11,237.96 after the FDIC ruled holders of deposits from Silicon Valley Bank.

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

The SVB is a victim of the Fed’s obsession with inflation

“The bank failures in the US in recent days are a stark reminder that fighting inflation can be very costly,” writes Daniel Pinto.

“It was naïve on the Federal Reserve’s part to imagine that it could take interest rates from zero to 4.75% in less than a year without causing chaos: financial sector bankruptcies, a brutal lack of funding for tech companies and more generally for the fastest growing and most promising sectors of the economy, major tensions on the real estate market and, last but not least, an impending national financial crisis.

“Most governments borrowed heavily to support their economies during Covid and now find themselves in an unsustainable situation of having to pay ever higher interest rates to service that debt.

“Where is the money going to come from when the private sector is slowing down and banks are struggling to play their vital role in supporting economic activity?”

Read more here

Why Did the Silicon Valley Bank Collapse?

Outside of tech circles, Silicon Valley Bank was relatively unknown in the UK. Now his name is on the lips of almost every business man after his sudden collapse – and the speedy rescue of his depositors – after a weekend of drama.

A wave of fear swept global financial institutions on Friday night, ushering in a weekend of crisis talks attended by Chancellor Jeremy Hunt, Prime Minister Rishi Sunak and Bank of England Governor Andrew Bailey.

Why Did the Silicon Valley Bank Collapse? And how did HSBC save its British arm?

US regional banks hit hard in premarket trading

With major US stock indexes expected to fall after Friday’s close when they open this morning, the outlook for regional banks could be more difficult.

Shares in regional bank First Republic Bank are down more than 60% in premarket trading, while shares in Texas-based Comerica are down nearly 20%, while shares in Ohio-based KeyCorp are down more than 11%. Wealth management firm Charles Schwab and SunTrust owner Truist are also down more than 6%.

movers at noon

This morning the FTSE 100 saw many more losers than climbers, with miners being the main exception to the downtrend in the market following the Silicon Valley Bank UK bailout deal.

Endeavor Mining was the day’s top mover, the only company whose shares are up more than 2%. Many of the biggest losers were banks or financial services firms, but Standard Chartered was joined by food delivery company Ocado and manufacturing company Melrose Industries in the bottom three.

SVB UK resumes operations today

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

The bank said customers shouldn’t notice any major changes in operations, but there may be delays in certain areas.