Technology-focused trusts and UK banks were among those in the firing line as investors took fright over the share price collapse of Silicon Valley Bank.
Scottish Mortgage hit its lowest point in nearly three years reflecting its portfolio laden with a plethora of US tech giants..
Shares tumbled 6% today 6% to 672.4p, the lowest it has been since May 2020.
In comparison, the tech-laden Nasdaq was down 0.91% to 11,235 in early trading.
Peer Allianz Technology Trust was also under the cosh shedding 5% to 231p, with banks also suffering on worries about what SVB’s problems might mean for the critical interbank market.
Lloyds Banking fell 3.7%, HSBC Holdings PLC (LSE:HSBA) by 5.4%, Barclays (LSE:BARC) by 4.9% and NatWest by 3.5%.
Insurers were also knocked with Prudential (LSE:PRU) down 4% and Legal & General 4% lower.
Across the pond, investors wiped US$52.4bn off the market value of the four largest US banks by assets on Thursday amid a widespread sell-off of financial stocks that analysts linked to investor fears over the value of lenders’ bond portfolios.
JPMorgan Chase, Bank of America, Citigroup and Wells Fargo rallied today on hopes that the difficulties at SVB would be contained as it had put itself up for sale.
On Wednesday, SVB revealed it had lost roughly US$1.8bn following the sale of a portfolio of securities valued at US$21bn, which it offloaded in response to a decline in customer deposits.
The losses prompted the bank to announce a share sale to shore up its capital position though this has subsequently been cancelled.
The haircut on the sale of the SVB securities shifted investor attention to the risks that might be lurking in the huge bond portfolios held by other US banks, spooking investors in lenders globally.
