FINANCIAL markets had another rollercoaster day as billions were wiped off banking shares and investors rushed for safer bets.
Shares in Britain’s Barclays, Lloyds and HSBC all fell heavily in the morning as traders digested Credit Suisse’s cut-price £2.6 billion takeover by its rival UBS.
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The deal was supported by central banks and the Swiss government as a measure to calm financial markets after panic gripped markets last week.
While shares in Credit Suisse tumbled by 60 per cent, UK and US banks started recovering their losses after a major coordinated effort by seven central banks to boost liquidity in the global financial system.
Simon French at Panmure Gordon said by increasing the amount of dollars in circulation to other banks and businesses it “added oil to the engine of financial markets, rather than petrol”.
The FTSE 100, London’s top index of big companies, rallied up 0.93 per cent, or 68.45 points, to 7,404.85 despite the market nervousness.
This was partly helped by demand for miners such as gold miners Endeavour Mining, Fresnillo and Antofagasta.
Gold trading prices have shot up to almost $2,000 an ounce with the precious metal long been seen as a safe harbour in times of economic uncertainty.
Meanwhile, the pound also gained against the euro and the dollar with analysts at Deutsche Bank saying that sterling was the best performing developed country currency this year.
