HSBC shares have taken a knock after one of the City's most feted fund managers sold his stock and raised concerns about further fines, writes Marion Dakers.

Neil Woodford, who left Invesco to set up his own investment firm in June, said that while HSBC is "a conservatively-managed, well-capitalised business" he feared that a string of record-breaking penalties in the banking industry are leading to "fine inflation" that could hurt its ability to pay dividends.

HSBC has already been hit with a $1.9 billion (£1.14bn) fine in 2012 for failing to prevent money laundering and Mr Woodford said it could be in line for fresh penalties that "are increasingly being sized on a bank's ability to pay, rather than on the extent of the transgression".

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HSBC shares closed down 0.7 per cent at 647.5p. The bank declined to comment.