The UK stock market announced its biggest quarterly fall since the Black Monday this week. The FTSE 100 suffered significant losses of up to 20 points in market value due to the adverse effects of the pandemic on Britain's economy.
The blue-chip index closed with only 5,6971 points. The FTSE 100 shed 24.8 percent off its market value in the last three months indicating significant losses of shareholder value.
The yield was considered the worst quarter where the stock showed a significant decline since 1984. It began with a 7,542-point value before the pandemic hit the UK economy. The adverse effects in the financial market caused investors in mid-February to withdraw their shares to prevent higher losses.
The report claimed that the FTSE 100 suddenly jumped showing a sudden flurry of stock-buying in the final minute of the latest trading session. It was up by 100 points or 1.8 percent and lifted the index to 5,663 points.
The UK market before the decline experienced for two consecutive days gains of the stock that indicated it could fall anytime soon. Hence, the yields for the last trading session showed that there was a 3.4 percent drop due to declining investor confidence in the US. This sent Asia's main markets to experience a free-fall.
According to an analyst at Scope Markets James Hughes, the worsening pandemic in the United States has adversely affected the figures on Wall Street yesterday after US President Donald Trump warned about the downfall of the market.
The blood-letting situation adversely affected Asia-focused financial institutions. Banking giant HSBC experienced a decline of 8.2 percent along with its smaller banking competitor Standard Chartered that experienced a 7.2 percent drop.
There was also a suspension of dividend payments by banks due to governmental pressure. Lloyds had a dividend yield of 10.5 percent, Barclays with 9.6 percent, Royal Bank of Scotland with 4.4 percent, HSBC with nine percent, and Standard Chartered with 4.9 percent.
According to the chief stock officer at Interactive Investor Richard Hunter, the announcement that banks would be suspending its existing and future dividends and share buybacks triggered a moral duty and enabled an additional capacity to lend. However, from an investment perspective, Hunter claimed that the move removed a core plank of the case for investors in buying bank shares.
The triple-digit loss of the FTSE 100 was weighed heavily on the market sentiment in the US. The Dow Jones Industrial Average closed 1.8 percent lower at 21,917 points also indicating its worst quarter in the last 124 years. The S&P 500 also closed 1.6 percent lower while the Nasdaq Composite fell by 0.9 percent to 7,700 points.
