Despite a strong close from the US last Friday, European investors hesitated after the bell on Monday. The FTSE 100 failed to celebrate the first step of the UK’s spring awakening, trickling lower and dropping to 6,715.62, while the pound was equally unenthused, flat against dollar and euro alike.
“An easing of restrictions in England failed to act as a catalyst for the FTSE 100 on Monday with the index trading modestly lower,” says AJ Bell investment director Russ Mould.
That same timidity had a green tinge to it in the Eurozone, where the CAC and DAX were both up 0.2%, leaving the latter short of its 14,800-plus all-time highs.
“A third wave of Covid-19 in Europe and the emergence of new strains of the disease is threatening to deflate the optimistic mood which had built up off the back of vaccine success,” Mould added.
This early reticence may be tied to the Archegos Capital situation. Friday saw significant losses for ViacomCBS, Discovery, and a selection of Chinese tech stocks, without immediate explanation.
Over the weekend it was then revealed that a margin call-hit Archegos was behind the selling, leading to warnings of ‘significant’ losses from Credit Suisse and Nomura on Monday morning.
“With both Credit Suisse and Nomura warning of a hit in the fallout from the saga, investors have been reminded of the interconnectedness of the global financial system and how this creates a risk of contagion when something goes wrong,” said Mould.
FTSE 100 Top Movers
Renishaw (2.63%), BT Group (1.54%) and Severn Trent (1.44%) led up the FTSE 100 on early Monday morning trading.
The biggest fallers on the UK index so far are Glencore (-2.68%), Smiths Group (-2.47%) and Flutter Entertainment (-2.37%).
Entain, owner of Ladbrokes and Party Poker, made a profit in 2020 as online gambling rose during the pandemic. The group confirmed an operating profit of £530m, up by 2% from 2019, with 89% of EBITDA coming from online business. The revenue generated from online gaming came in at £2.7bn, as 75% of the FTSE 100 company’s revenue is now online.