Banks, travel stocks put FTSE 100 on course for worst day since June

The FTSE banking index fell another 4.9% on Monday after media reports said banks including Barclays , HSBC and Standard Chartered moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money. HSBC, already trading at decade lows, slid 4.2%, while Standard Chartered dropped 4.1% to its lowest since 1998.

A slide in HSBC and Standard Chartered set the FTSE 100 on course for its worst day in three months on Monday after reports the banks were among those that moved allegedly illicit funds over the past two decades, while travel stocks plummeted on fears of more coronavirus-related lockdowns. The blue-chip FTSE 100 sank 2.8% to a two-week low, with British Airways-owner IAG plunging 12.6% on news that Prime Minister Boris Johnson was pondering a second national lockdown to contain a surge in COVID-19 cases.

An index of travel and leisure stocks, already among the biggest decliners this year, tumbled 5.6%. The mid-cap FTSE 250 fell 3.1% to its lowest in nearly two months. "The possibility of new lockdowns is leading the market to be absolutely risk-averse toward consumer-facing sectors like travel, restaurants, and retailers," said Michael Hewson, an analyst at CMC Markets UK.

A rally in UK stock markets has petered out this month as the spread of the novel coronavirus threatens a nascent business recovery, with banking stocks taking a further hit from the Bank of England's announcement that it was looking at negative interest rates. The FTSE banking index fell another 4.9% on Monday after media reports said banks including Barclays, HSBC, and Standard Chartered moved large sums of allegedly illicit funds over nearly two decades despite red flags about the origins of the money.

HSBC, already trading at decade lows, slid 4.2%, while Standard Chartered dropped 4.1% to its lowest since 1998. Barclays tumbled 5.9%. Fashion retailer Superdry sank 12.8% after posting an annual loss due to lockdown-led store closures, while the world's largest exhibitions group, Informa Plc, fell 2.8% as it reported a half-year operating loss.

Aero-engine maker Rolls-Royce plunged 9.6% to its lowest since 2004 after it confirmed it was considering a rights issue of up to 2.5 billion pounds ($3.23 billion).

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