Sharp sell-off of banking stocks expected as nervous 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 banking stocks around the world.
In London, traders and bankers spent the weekend assessing exposure to First Republic’s fallout in what some described as a “marathon.”
Contagion fears are on the rise, which could expose other lenders. While many investors say this is not a ‘Lehman’s moment’, others think other banks could be in trouble now.
Aftermath: In London, traders and bankers spent the weekend assessing exposure to First Republic’s fallout in what some described as a ‘marathon’
Traders are particularly nervous that central banks will continue to raise rates during a banking crisis. Nevertheless, many experts insisted that the trials of the First Republic were a delayed response to the March unrest rather than the start of a new phase in the crisis.
Analysts expect HSBC, Lloyds, Barclays, NatWest and Standard Chartered to all be sold after already wiping billions off their share prices this year.
Last week, NatWest posted strong gains, but investors were disappointed by deposit numbers that showed billions leaving the bank.
Medium-sized lenders such as Metro Bank will also be monitored, as well as challenger banks such as Monzo, Revolut and Starling Bank.
A 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.’