Shares took a further dive yesterday as London traders got the chance to react to the talk of interest rate rises in the US.
The FTSE 100 Index sank as low as 6,500 during the session but a stronger start on Wall Street helped it regain some lost ground and close 30.69 points lower at 6,542.44.
David Madden, market analyst at IG, said: “British banks are under pressure as the possibility of economic sanctions being imposed on Russia by the west could lead to a tit-for-tat economic war.”
Barclays was 2.85p lower at 238.65p and Lloyds slipped 0.3p at 78.75p. But Royal Bank of Scotland was up 3.8p at 305.3p as broker Investec pointed out that its shares had shed 17 per cent since its results announcement three weeks ago and advised closing short positions on the stock.
The fall-out from Wednesday’s Budget was still much in evidence, particularly among gambling stocks after the Chancellor increased the tax on fixed odds betting terminals.
William Hill, which saw shares fall 7 per cent in the wake of the Chancellor’s announcement, was off as much as 3 per cent in the latest session, wiping up to £300 million from its value since Tuesday night. It pared back some of the losses later to close down 4.9p, or 1 per cent, at 346.6p. Ladbrokes, which had also dropped sharply in the wake of the Chancellor’s speech, fell by a further 6.3p, or 4 per cent, to 1,34.1p.
The pensions industry has also been battered after the Chancellor removed the obligation on its customers to buy an annuity on retirement.
Friends Life owner Resolution was the biggest faller in the FTSE 100, off by 5 per cent, or 16.9p, to 318.1p as it warned of the impact on new business flows in the individual annuity market.