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* FTSE 100 down 3.8%, FTSE 250 falls 3.7%
* Major UK lenders drag down FTSE 100
* Glencore lower after delaying dividend payout
* Auto Trader issues new shares to shore up cash
(Updates to close)
By Sruthi Shankar and Devik Jain
April 1 (Reuters) - London's stock markets tumbled on
Wednesday as banking shares dived after suspending dividend
payments, while plunging factory activity in Britain and
elsewhere underlined the severe economic impact of the
coronavirus pandemic.
Shares of Barclays, HSBC, Lloyds Banking
Group, Royal Bank of Scotland and Standard
Chartered dropped between 5% and 12%, dragging the FTSE
100 lower by 3.8%.
The lenders said on Tuesday they would halt dividends,
bowing to pressure from the regulator, to save their capital as
a buffer against potential losses from the virus outbreak.
"We worry that the move undermines confidence in the
regulatory framework and raises cost of capital," BofA Global
Research's Rohith Chandra-Rajan wrote in a client note, adding
he expected no payouts from domestic UK banks until 2021.
Commodity miner Glencore fell 3.7% as it delayed
its $2.6 billion dividend pay out for this year and said there
could be material disruption to production due to the
coronavirus.
The FTSE 100 recorded its worst quarter since 1987 on
Tuesday amid growing evidence of pain for businesses and
economic growth from the pandemic that led to a 27% increase in
the number of deaths in Britain on Tuesday.
Despite policymakers injecting trillions of dollars into the
global economy, the blue-chip index is down about 29% from its
Jan. 17 peak, while an index of mid-cap shares are more
than 34% below all-time highs.
Factory activity data from the UK echoed that of Asia and
Europe, with output from Britain's manufacturing sector in March
shrinking at the fastest pace since the euro zone debt crisis.
Wall Street also dropped as data showed new factory orders
slumped to an 11-year low last month, adding to woes after U.S.
President Donald Trump warned the country faced a tough two
weeks ahead in its battle against the coronavirus.
"What the market really wants to see is the number of cases
and deaths starting to come down in Europe and the United States
and the impact of the lockdown on companies," said Roland
Kaloyan, head of European equity strategy at Societe Generale.
"It is not so well known. Two-thirds of European companies
have not changed or withdrawn guidance."
Companies listed on the pan-European STOXX 600 are
expected to report a 21.9% decline in earnings in the second
quarter, according to Refinitiv data, down from a 14.9% drop
forecast the week before.
Oil major BP Plc fell 3.1% after rating agency
Moody's cut its outlook to "negative". The company also slashed
its 2020 spending plan by 25% and will reduce output from its
U.S. shale oil and gas business in the wake of a collapse in oil
prices.
Online car market place Auto Trader dropped 11%
after saying it would sell new shares worth 5% of its capital to
shore up its finances and liquidity position.
(Reporting by Devik Jain and Sruthi Shankar in Bengaluru;
Editing by Shounak Dasgupta and Ken Ferris)
