- Bank crisis sends markets tumbling
- Capital preservation funds back in focus
- Technology shares surge as bond yields fall
It has been a brutal week for banks amid fears of contagion risk from the failure of Silicon Valley Bank and rescue of Credit Suisse (CSGN:SWX) with knock-on effects across stock markets.
The FTSE 100 has lost 4% while the domestically focused FTSE 250 is down around 3%. The banking sector has taken the brunt of the selling with Barclays (BARC) down 9%, NatWest (NWG) down 8%, HSBC (HSBA) off 7%, and Lloyds (LLOY) down 5%.
With so much uncertainty still hanging in the air ahead of next week’s Federal Reserve and Bank of England interest rate policy meetings it perhaps isn’t surprising to see investors dive for cover.
Capital preservation funds have seen increased investor interest according to the AJ bell platform which ranks trusts by number of customer trades and value.
Capital Gearing Trust (CGT), Personal Assets (PNL) and Ruffer Investment Company (RICA) occupy the third to fifth spots in terms of value of trades over the past week. By comparison over the last month, they languished near the bottom of the table.
TECHNOLOGY SHARES GAIN
Still occupying top spot is Baillie Gifford-managed technology focused trust Scottish Mortgage (SMT). The tech sector and growth shares in general have seen a resurgence during the current market turmoil as interest rate expectations have plummeted.
The Nasdaq 100 index has surged 6% over the past week, led by gains in computer chip makers Intel (INTC:NASDAQ) and Advanced Micro Devices (AMD:NASDAQ), which are both up over 15%.
Other gainers include Facebook owner Meta Platforms (META:NASADQ), up 13%, as well as Microsoft (MSFT:NASDAQ) and Google-owner Alphabet (GOOG:NASDAQ), which have both risen by 9%.
Healthcare was also in focus this week after Pfizer (PFE:NASDAQ) acquired Seagen (SGEN) at a 45% premium and gene sequencing company Illumina (ILMN:NADAQ) attracted the interest of activist investor Carl Icahn, giving the shares an 11% boost.
