UK stocks hit as Beijing cracks down on capital outflows

(Sharecast News) - Shares some of the UK's biggest financial stocks tumbled on Thursday, on reports banks were restricting investment accounts following moves by Beijing to crack down on capital outflows. Asia-focused firms caught up in the sell-off included HSBC, Standard Chartered and insurer Prudential.

According to the South China Morning Post, residents of mainland China appear to be facing greater restrictions on opening offshore accounts at mainland branches of Hong Kong banks.

The report said the Shanghai branch of Hong Kong's Bank of East Asia had suspended opening accounts that allow people on the mainland to invest overseas, which are typically favoured by high net worth customers. The newspaper referenced an unnamed bank manager who said clients had been surprised by the decision.

Beijing is looking to boost regulatory oversight of capital outflows - which reportedly reached $807bn last year, the highest on record - and earlier in the week they expanded outbound investment regulations to explicitly cover individual investors for the first time, according to The Straits Times.

As at 1430 GMT, HSBC was off 3% at 1,344.4p, Standard Chartered had shed 5% at 1,918.5p and Prudential had slid 7% at 978.6p.