Investor concerns remain as European markets end the week lower


The dramatic week for European markets ended on a low as a series of interventions by global banks failed to calm the nerves of nervous investors.

London’s FTSE 100 ended firmly in the red despite posting gains in early trading on Friday.

It followed a group of US banking giants injecting $30 billion (£25 billion) into First Republic Bank, a mid-tier lender whose share price has fallen sharply in recent days.

But concerns over the stability of the broader banking sector prevailed and investors continued to sell off shares in the First Republic and troubled Swiss bank Credit Suisse.

If we get through the weekend without further drama, Monday’s opening could look very different, but it will take time for the wounds to heal

Shares in British banks Barclays, Lloyds and HSBC all fell, although the biggest drag on the FTSE 100 came from telecoms giant BT Group.

The blue chip index closed 74.63 points, or 1.01% lower, at 7,335.4.

Confidence in the UK economy was also hit by a damning new analysis from the OECD, which predicted Britain would be the only country in the G20, aside from Russia, whose economy would contract this year.

The economics group forecasts gross domestic product (GDP) to fall by 0.2% this year, followed by a 0.9% increase next year.

Craig Erlam, Senior Market Analyst at OANDA, said: “A hectic week in financial markets is coming to an end and it is clear that investors are very concerned about taking risk into the weekend.

“We’ve all seen how quickly things can move over the weekend and the risk-off trading at the end of this week shows how nervous investors are about further repercussions.

“If we get through the weekend without further drama, Monday’s opening could look very different, but it will take time for the wounds to heal.

“Despite all the actions taken this week by the Federal Reserve, Treasury, Bank of England, Swiss National Bank and US banks to stabilize the situation, we still see trouble in the markets.

“Credit Suisse is down 10% today and not far from Wednesday’s lows, while First Republic is down 23% and nearly 80% in just over a week.”

Other major European stock markets also ended lower, with Germany’s Dax down 1.33% and France’s Cac down 1.43%.

Trading in the US also began with setbacks. The S&P 500 fell 0.9% and the Dow Jones was down 1% before the European markets closed.

However, the pound held up as the week drew to a close. Sterling was up 0.5% against the US dollar to 1.2170 and flat against the euro at 1.1406.

In company news, shares in BT Group fell after Britain’s communications regulator said it had delayed completing its investigation into a new Openreach pricing plan.

Openreach, which is owned by telecoms giant BT Group, could be forced to delay its wholesale broadband offering pending Ofcom’s investigation into whether it is breaching competition rules.

BT sank to the bottom of the FTSE 100 and its share price closed 6% lower.

Meanwhile, Rolls Royce shares fell on Friday after the company announced it had received funding from Britain’s space agency to supply a nuclear reactor for a lunar base.

The engineering giant plans to have a reactor ready to be sent to the moon by 2029. But the announcement wasn’t enough to excite investors, and the stock price closed 4.1% lower.

The biggest climbers in the FTSE 100 were Endeavor Mining up 42p to 1,760p, Glencore up 9.45p to 432.65p, the London Stock Exchange Group up 144p to 7,470p, Fresnillo up 12.1p to 710p and Imperial Brands up 22p to 1,884.5p.

The biggest losers on the FTSE 100 were BT Group down 8.9p to 137.75p, Abrdn down 11.7p to 199.3p, Hiscox down 53p to 1,042p, Ocado Group down 19.5p to 416.1p and Rolls-Royce down 6p to 140.3p. Investor concerns remain as European markets end the week lower

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