Bank shares tanking with coronavirus hit shutting services

Major-bank shares crashed on Monday, as major cities announced shutdowns of all non-essential activity.

Major-bank shares crashed on Monday, leading the broader market sharply lower as major cities announced shutdowns of all non-essential activity.

The ASX200 index was 7.1 per cent lower at 1pm but the big four fared even worse, shedding 8-11 per cent of their value.

Macquarie gave up an extraordinary 15.6 per cent, down $13.31 to $71.75.

National Australia Bank was the worst of the major banks, slumping $1.66, or 10.6 per cent, to $14, followed by Westpac, down $1.61, or 10.2 per cent, to $14.16.

ANZ Bank retreated $1.52, or 9.5 per cent, to $14.50, and Commonwealth Bank slumped $5.16, or 8.6 per cent, to $54.75.

The mushrooming cost of keeping the financial system and the economy functioning has spooked investors.

A senior banker said billions of dollars “is being shovelled out the door”.

The support package announced by the government has so far cost $189bn - about 10 per cent of gross domestic product.

Despite this, a massive increase in unemployment is expected due to the sweeping nature of the lockdown.

Perpetual head of investment strategy Matt Sherwood said the handouts to business would help but more was required.

“The rise in unemployment to double-digit territory will take considerable time to unwind, so the recovery is likely to be more subdued than current expectations,” Mr Sherwood said.