FTSE 100 slumps as banks hit by dividend halt

London's stock markets suffered sharp losses on Wednesday, as banking shares dived after suspending dividend payments while plunging factory activity across Asia underlined the economic hit from the coronavirus pandemic. Shares of Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered dropped between 3% and 7%, dragging down the blue-chip FTSE 100 by 3.2%.

The lenders said on Tuesday they would suspend dividend payments, bowing to pressure from the regulator, to save their capital as a buffer against potential losses from the virus outbreak. The FTSE 100 recorded its worst quarter since 1987 on Tuesday amid mounting evidence of the economic damage from the pandemic that led to a 27% increase in the number of deaths in Britain on Tuesday.

Commodity miner and trader Glencore fell 3.3% as it delayed its $2.6 billion dividend payout for this year and said there could be material disruption to production due to the coronavirus.

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