PLANS to impose a Tobin tax across the European Union sent shares in London’s financial stocks tumbling yesterday.
German chancellor Angela Merkel and French President Nicolas Sarkozy unveiled proposals to push for a pan-European financial transactions levy on Tuesday evening.
Analysts say any such charge would hit European financial centres like the City and especially those businesses that rely on a large number of financial transactions for their revenues.
Interdealer broker Icap and spreadbetting company IG Group both tumbled 3.7 per cent to close at 16.5p and 15.8p respectively, while Tullett Prebon shed 4.2 per cent to 15.5p on the back of the news. Shares in the London Stock Exchange also tumbled, falling 2.8 per cent to 24.5p.
James Hamilton, an analyst at Numis, said the internationally-focused Icap and Tullett had the least to lose should trade relocate elsewhere, while the London Stock Exchange and IG Group would be more impacted by clients taking business to other jurisdictions.