Tuesday newspaper round-up: $3trn lost, AAA rating, EU negotiation, banks
Global stock markets lost a record $3trn in the past two trading days after a sharp sell-off in equities around the world in response to the UK referendum vote to leave the EU. Observers said the falls on the first day after the vote on Friday were tied mainly to the short-term unwinding of trading positions related to expectations of a Remain vote ahead of the shock result, while the further selling on Monday was more about long-term revaluing of assets in anticipation of the potential fallout from the decision. - Financial Times
Banks
4,017.71
09:00 25/04/24
Cboe UK 100
807.35
09:10 25/04/24
Food & Drug Retailers
3,886.72
09:00 25/04/24
FTSE 100
8,077.57
09:00 25/04/24
FTSE 250
19,632.48
09:00 25/04/24
FTSE 350
4,434.67
09:00 25/04/24
FTSE All-Share
4,388.38
09:00 25/04/24
GBP/EUR
€1.1666
10:16 25/04/24
GBP/USD
$1.2512
10:16 25/04/24
Morrison (Wm) Supermarkets
286.40p
16:55 26/10/21
Volkswagen AG
€138.80
09:00 25/04/24
Markets are braced for another torrid session after Britain was stripped of its top-notch credit rating last night. S&P was the last of the three major agencies to rank Britain AAA, but, in an unusually severe move, slashed the rating two notches and left it on “negative” outlook, leaving the country on a par with France. - The Times
Britain’s decision to leave the EU has continued to reverberate around the Asia-Pacific financial markets as some analysts warned that global markets were bracing for a full-blown recession in the UK. “Markets already appear to be pricing in a full-blown recession in the UK and rising recession risk in the rest of Europe,” said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management. - The Guardian
Britain must pursue a Norway-style agreement with the EU if it is to avoid a damaging recession, according to Morgan Stanley. The bank said negotiating membership of the European Economic Area (EEA) and retaining access to the single market would help the UK to secure a "civilised divorce" from the EU. - The Telegraph
Italy is preparing a €40bn rescue of its financial system as bank shares collapse on the Milan bourse and the powerful after-shocks of Brexit shake European markets. An Italian government task force is watching events hour by hour, pledging all steps necessary to ensure the stability of the banks. “Italy will do everything necessary to reassure people,” said premier Matteo Renzi. - Telegraph
David Cameron will travel to Brussels on Tuesday to explain to Europe’s stunned leaders why Britain has voted for Brexit, as Conservative MPs pushed to speed up the process of replacing him as prime minister. Cameron will meet the European commission president, Jean-Claude Juncker, and the European council president, Donald Tusk, before a working dinner with his counterparts from the 27 other member states, at which the verdict in Thursday’s historic referendum will be the only item on the agenda. - Guardian
The world’s biggest banks are pushing regulators and politicians for answers so they can plan for the future of their London operations after the UK’s vote to leave the EU. Lenders including HSBC, JPMorgan and Morgan Stanley had warned before Thursday’s vote of thousands of job cuts because they would no longer be able to use London as a jumping off point for selling into the EU. - Financial Times
Britons are more likely to see Father Christmas climb down their chimneys than secure unfettered access to the single market and restrict free movement of people into the UK. That was the blunt message from Jean-Claude Piris, the former director-general of the EU council’s legal service, which has been echoed by many European leaders. If Britain wants to do a deal, it needs to play by the rules. - Telegraph
David Cameron’s successor as Conservative leader and prime minister should be elected by September 2, senior Tories have announced, in a fast-track contest that is likely to help Boris Johnson in his bid to reach Number 10. Nominations for the new leader should open on Wednesday evening and close on Thursday lunchtime, a tight timetable giving little time for low-key candidates to gather support among MPs or Conservative grassroots supporters in the country. - Financial Times
Britain’s steel industry could “crumble” because of the Brexit referendum, according to union leaders, who are now demanding an urgent meeting with the Government over their concerns. Community, the union which represents steelworkers, is calling for talks with Business Secretary Sajid Javid to address fears that the crisis-hit steel industry will fail as the referendum dominates the agenda. - Telegraph
Morrisons has the worst record among major supermarkets for mistreating suppliers, according to a report by the industry watchdog. A fifth of respondents to a survey of more than 1,000 suppliers and trade associations said that Morrisons “rarely” or “never” complied with industry rules governing supply chain relations. - Times
Sadiq Khan today demands that a representative for London is appointed to the UK’s team for negotiations over its departure from the European Union. The mayor of London is expected to insist that the capital deserves a seat around the table as British and European officials thrash out the details of Brexit over the coming years. - Times
Britain’s historic vote to leave the EU has prompted some of the world’s most powerful investment houses to turn their focus to inequality. Bank of America and the international investment firm Pimco have warned their clients that the gulf between rich and poor could spark a further anti-establishment backlash. - Guardian
KPMG’s role in assessing HBOS’ finances in the year ahead of its collapse in the financial crisis will at long last come under scrutiny, the UK’s audit watchdog has decided. Eight years on from the bank’s collapse, takeover by Lloyds, and subsequent taxpayer bailout, the accountants’ work will be investigated by the Financial Reporting Council. - Telegraph
Volkswagen’s settlement with nearly 500,000 US diesel owners and government regulators over polluting vehicles is valued at more than $15bn (£11.3bn) cash, a source briefed on the matter said on Monday night. The settlement, to be announced on Tuesday in Washington, includes $10.03bn to offer buybacks to owners of about 475,000 polluting vehicles and nearly $5bn in funds to offset excess diesel emissions and boost zero emission vehicles, the source said. - Guardian
Over his eight years as mayor of London, Boris Johnson made a name for himself as an outspoken defender of bankers when their reputation in the rest of the country could scarcely have been lower. Yet as Britain and its finance industry deal with the aftermath of last week’s Brexit vote, his stock in the Square Mile could scarcely be lower. “He’s a bloody clown and should be shot for what he’s done,” one chief executive of a London stockbroker said, speaking hours after the result of the vote had been announced. - Times