(Alliance News) - Stocks in London are set to fall at Friday's open, as sentiment is hit by turbulence in the US banking sector and ahead of the latest US jobs print.

IG says futures indicate the FTSE 100 index of large-caps to open down 111.3 points, 1.4%, at 7,768.68 on Friday. The FTSE 100 index closed down 49.94 points, 0.6%, at 7,879.98 on Thursday.

Investor sentiment worldwide was rocked overnight, prompted by a sell-off in US banking stocks.

The four largest US banks saw their stock prices lose a cumulative USD52 billion on Thursday, as the financial sector digested trouble at SVB Financial, a major Silicon Valley-focused lender.

Shares of SVB Financial plummeted 60% on Thursday and continued to fall in after-hours trading, following an announcement the prior evening that it had lost USD1.8 billion in sales of securities to raise funds.

That massive drop rippled through the financial sector, with biggest US bank JPMorgan Chase ending the day down 5.4%. Bank of America and Wells Fargo both fell 6.2%, while Citigroup lost 4.1%.

SVB's disclosure came on top of an announcement the same day that crypto banking firm Silvergate plans to shut down in the face of cryptocurrency market turmoil.

"Given current capital positions and strict risk management protocols, the contagion risk from small to large banks is remote...Hence, the risk of a capital or liquidity event among large banks is also remote," commented SPI Asset Mangement's Stephen Innes.

"[This suggests] last night's financial stock meltdown could extend to a more idiosyncratic rather than a recurring event," he concluded.

Wall Street ended deep in the red amid the banking stock sell-off. The Dow Jones Industrial Average closed down 1.7%, the S&P 500 1.9% and the Nasdaq Composite 2.1%

Trading in Asia on Friday was similarly negative, as the S&P/ASX 200 in Sydney closed down 2.1%.

In China, the Shanghai Composite was down 1.1%, while the Hang Seng index in Hong Kong was down 2.5%.

Xi Jinping was handed a third term as Chinese president on Friday, capping a rise that has seen him become the country's most powerful leader in generations.

The appointment by China's rubber-stamp parliament comes after Xi locked in another five years as head of the Chinese Communist Party in October.

The Nikkei 225 index in Tokyo closed down 1.7%, after the Bank of Japan left its ultra-easy monetary policy unchanged in Governor Haruhiko Kuroda's last policy-setting meeting.

The central bank left its longstanding negative interest rate in place and made no further adjustments to the band in which rates for 10-year government bonds fluctuate. Economics professor Kazuo Ueda will become the bank's next governor in April.

Against the yen, the dollar was quoted at JPY136.68 early Friday, up versus JPY136.29 at the London equities close on Thursday. Sterling was quoted at USD1.1925, unchanged from USD1.1926. The euro traded at USD1.0588, a touch higher than USD1.0580.

Trading was nervous ahead of the latest US non-farm payrolls print on Friday at 1330 GMT.

According to FXStreet-cited expectations, the US economy is expected to have added 205,000 jobs in the last month. In January, 517,000 jobs were added.

"Today's US jobs data could keep the 50 basis point hike expectations alive, or tilt the balance to 25bp hike again," said Swissquote Bank's Ipek Ozkardeskaya.

Gold was quoted at USD1,831.18 an ounce early Friday, up from USD1,827.92 on Thursday. Brent oil fetched USD81.25 a barrel, down from USD83.15.

In Friday's UK corporate calendar, there is a trading statement from housebuilder Berkeley Group.

Aside from the nonfarm payrolls report, Friday's economic calendar has a UK gross domestic product reading and German inflation data at 0700 GMT.

By Elizabeth Winter, Alliance News senior markets reporter

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