The bulk of the currency’s slide on Monday took place in a frantic 20-minute selloff.
Shares of Europe-focused-lenders HSBC and Standard Chartered fall in Asia trading, tracking the pound’s drop to a record low versus the dollar amid UK’s plan to carry out more tax cuts.
The bulk of the currency’s slide on Monday took place in a frantic 20-minute selloff, evoking cries of a flash crash by traders HSBC drops as much as 8.3% in Hong Kong, the most since April 2020; Standard Chartered falls as much as 8.2%, the most since March 2020.
The drop in banks’ share prices “is a reflection of movements in the pound, which is, in turn, a reflection of policy announcements made on Friday,” Morningstar Inc. senior equity analyst Michael Wu said by phone.
UK’s “budget will only add to inflation from where it already is, and adds to multiple risks of a recession”.
HSBC and StanChart are among four Hong Kong blue-chip companies with heavy UK and European exposure. According to Morningstar, HSBC derived 41% of its revenue from Europe in 2021.