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

At midday the benchmark FTSE 100 index was down 3.4%, at 5,482 points.

Britain's Prudential Regulatory Authority requested that the country's biggest banks cancel their 2019 final dividend payments and as well as 2020 dividends and bonuses to senior management.

Bank 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.

The total amount due from 2019 dividends alone was expected to be in the region of £7.5bn.

Shares in Barclays fell 7.1% to 87.4p, HSBC fell 8.3% to 417p, Lloyds fell 5.5% to 30.2p and RBS fell 5.9% to 106.2p.

Online car selling portal Auto Trader reversed 9.3% to 398.5p after announcing that it would raise funds through an equity placing to bolster its balance sheet and was unlikely to pay a final dividend.

Autotrader said the capital raise, for which a price would be determined via an accelerated bookbuild, would 'ensure we avoid constraints that might otherwise be imposed in the medium term in order to meet debt covenants' while it offered car retailers free advertising this month.

Defence technology company QinetiQ fell 1.9% to 316p following its decision to defer a decision on paying a final dividend until later in the year.

Estate agent Savills dropped 5.4% to 781p as it withdrew dividends which is had announced less than a fortnight ago to conserve cash.

Savill said it intended to consider an 'enhanced' interim dividend on or around the revised date of its annual general meeting, but only if conditions improved.

Home builder Taylor Wimpey fell 5.7% to 110.8p on announcing that its executives and directors had taken a salary and bonus haircut.

Hospital owner Spire Healthcare lost 6.3% to 73.2p, having secured a waiver on covenant testing from its lenders while it assists Britain's National Health Service to combat the disease outbreak.

Engineering services group Renew Holdings shed 6.4% to 352p as it too decided to suspend its interim dividend.

Healthcare facility owner Primary Health Properties traded sideways at 160.6p after announcing that it would continue paying dividends as planned, and that its rental collection continued to be 'robust'.

Bathroom accessory supplier Norcros was a rare gainer, up 2.6% to 128.7p despite announcing that demand for its products had slowed following government lockdowns in the UK and South Africa.

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