UK banks index drops to eightweek low
FTSE 100 down 1.9, FTSE 250 off 2.1
FTSE on track for worst weekly decline since September

March 10 Reuters London39;s bluechip FTSE 100 index fell on Friday as UK lenders dropped 4.6 in a global banking sector selloff, while uncertainty around central banks39; moves added to the nerves ahead of U.S. payrolls data.

UK banks dropped to an eightweek low, spooked by a brutal rout in U.S. bank SVB Financial following a share sale.

HSBC, Barclays, Lloyds and Natwest Group dropped between 3.1 and 5.2 on fears of broader banking system stress.

Developments at SVB Financial have raised questions on the subject of unrealised losses on bond portfolios and what it means for bank capitalisation levels, said Chris Turner, global head of markets and regional head of research for UK and CEE.

The FTSE 100 slipped 1.9 to a five week low, while the more domestically focused midcap index gave up 2.1 to hit a twomonth low.

Data that showed the British economic output rose by a betterthanexpected 0.3 monthonmonth in January bolstered bets that the Bank of England will raise interest rates again this month.

Across the Atlantic, U.S. nonfarm payrolls data, due at 1330 GMT, is expected to show a rise of 205,000 and any surprise to the upside is seen strengthening bets for continued aggressive interest rate hikes.

The FTSE 100 is set to the end the week down about 2.8 in what could be its worst week since September, as worries around hawkish…