THE TELEGRAPH: The FTSE 100 has fallen to a six-year low after HSBC dragged the market downwards by confirming a £12.5bn rights issue.
The leading index of UK shares fell by over 3pc and below the 3,700 mark for the first time since April 2003.
The sharp decline takes the FTSE 100 below the lows experienced last October as UK banks teetered on the edge of collapse and were bailed out by the Government.
Investors have been spooked by HSBC's rights issue, which is priced at an almost 50pc discount to the closing price on Friday, while sentiment has also been damaged by stock market falls in Asia.
HSBC, Europe's largest bank, had previously avoided any form of capital raising. However, in its full year results, it warned that 2009 will be "difficult" and reported a $15.5bn (£10.9bn) loss in the US.
The announcement sent shares in the bank down almost 10pc and also pulled Standard Chartered, which like HSBC conducts a significant amount of business in Asia, down by a similar amount.
Other UK banks, including Royal Bank of Scotland, Lloyds Banking Group and Barclays, all saw their share price tumble by at least 5pc. >>> By Graham Ruddick | Monday, March 2, 2009
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