FTSE 100 down almost 2% as troubles at tech-focused lender Silicon Valley Bank cause ripples
An overnight sell-off of US banking stocks, prompted by troubles at the tech-focused lender Silicon Valley Bank (SVB), has seeped into European markets and sent the FTSE 100 down almost 2% on Friday.
Investors were spooked by news that California-based SVB, which primarily lends to tech startups, had launched an emergency share sale to shore up cash after revealing it had lost $1.8bn (£1.5bn) when it sold a portfolio of bonds in response to a decline in customer deposits.
SVB’s US-listed shares plunged 60% on Thursday but the rout also spread to other Wall Street stocks. SVB’s own shares were down as much as 66% in late pre-market trading on Friday.
The plunge in banking sector share prices was prompted by investors worried about the wider impact that the recent increase in interest rates would have on the value of other banks’ portfolios of bonds, which tend to fall in price when interest rates rise.
