StockMarketWire.com - UK stocks opened sharply lower on Wednesday after the country's major banks all suspended dividend payments as they moved to conserve cash during the Covid-19 crisis.

At 0821, the benchmark FTSE 100 index was down 196.91 points, or 3.5%, at 5.475.05.

Britain's prudential regulator requested that the country's banks cancel their 2019 final dividend payments and each bank also indicated they would defer upcoming payments, too.

Banking stocks are typically seen by investors as a reliable source of yield, but the sector is expected to come under increasing strain as households and businesses start defaulting on loan repayments.

Barclays fell 4.7% to 89.69p, HSBC fell 7.4% to 420.7p, Lloyds fell 4.0% to 30.72p and RBS fell 3.9% to 108.55p.

Online car selling portal Auto Trader reversed 4.7% to 418.7p, on announcing that it would raise funds through an equity placing to bolster its balance sheet during the Covid-19 crisis, and was unlikely to pay a final dividend.

Autotrader said the capital raising, for which a price would be determined via a bookbuild, would 'ensure we avoid constraints that might otherwise be imposed in the medium term in order to meet debt covenants'.

Defence technology company QinetiQ fell 4.7% to 306.8p after it decided to defer a decision on paying a final dividend until later in the year.

Healthcare facility owner Primary Health Properties reversed 1.5% to 158.19p, despite announcing that it would continue paying dividends as planned, and that its rental collection continued to be 'robust'.

Estate agent Savills dropped 4.0% to 792p as it withdrew dividends announced last month to conserve cash.

Still, Savill said it intended to consider an 'enhanced' interim dividend on or around the revised date of its annual general meeting, should conditions improve.

Home builder Taylor Wimpey fell 3.1% to 113.85p on announcing that its executives and directors had taken a salary and bonus haircut.

Hospital owner Spire Healthcare gained 2.4% to 80p, having secured a waiver on covenant testing from its lenders while it assists Britain's National Health Service to combat the disease outbreak.

Bathroom accessory supplier Norcros lost 0.4% to 125p after announcing that demand for its products had slowed markedly following government lockdowns in the UK and South Africa.

Engineering services group Renew shed 3.0% to 364.84p as it too decided to suspend its interim dividend.

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