UK’s FTSE 100 fell on Monday, with banks extending losses as shock waves continue to reverberate through financial markets after US regulators closed Silicon Valley Bank (SVB), while British American Tobacco dipped after a brokerage downgrade.

The blue-chip FTSE 100 lost 0.4%, while the more domestically-focussed FTSE 250 midcap index was flat.

UK banks fell 1.1% in early trading, after the sector lost more than 6% last week. Limiting losses, the US authorities announced plans over the weekend to limit the fallout from the collapse of SVB, while investors wagered that a rate hike this month was no longer a certainty.

HSBC said it will acquire the UK subsidiary of SVB for 1 pound, rescuing a key lender for technology startups in Britain. Shares of HSBC dipped 0.1%. British American Tobacco, the manufacturer of Lucky Strike cigarettes, fell 2% to the bottom of the benchmark after JP Morgan cut stock rating to “neutral” from “overweight”.

Banks drag FTSE 100 to 1-month low

Bucking the sombre mood, precious metal miners took an early lead, jumping 4.2% as gold prices edged higher against a weakening US dollar.