(Alliance News) - Stocks in London ended mostly lower on Monday with a stronger pound hindering the FTSE 100, while US stocks fell linked to problems at a US-based hedge fund.
The FTSE 100 index closed down 4.42 points, or 0.1%, at 6,736.17. The FTSE 250 ended down 51.19 points, or 0.2%, at 21,435.54, and the AIM All-Share closed up 1.27 points, or 0.1%, at 1,193.77.
The Cboe UK 100 ended up 0.1% at 672.37, the Cboe UK 250 closed down 0.3% at 19,166.72, and the Cboe Small Companies ended down 0.2% at 13,881.03.
Both the CAC 40 in Paris and the DAX 30 in Frankfurt ended up 0.5%.
"UK markets are lagging their mainland European counterparts today, with a strengthening pound doing little to help the FTSE 100. Shipping in the Suez canal returned to normality today, with the 'Ever Given' being dislodged after shutting the critical waterway for almost a week," said IG Group's Josh Mahony.
"Banking stocks in the US have lagged on concerns that the sector could be hit hard after hedge fund Archegos Capital were forced to sell huge positions in US and China stocks," Mahony added.
In the FTSE 100, Renishaw ended the best performer, up 4.2%. Bloomberg late Friday reported that the engineer is attracting potential takeover interest from Danaher Corp and Swedish rival Hexagon. The recent FTSE 100 entrant earlier in March put itself up for sale.
BT Group closed up 2.9% after Morgan Stanley upgraded the former state telecom monopoly to Overweight from Equal Weight.
At the other end of the large-caps, Barratt Developments ended down 2.7% after JPMorgan downgraded the housebuilder to Neutral from Overweight.
Meanwhile, Deliveroo said it will price shares for its highly anticipated stock market listing towards the bottom of its price range due to "volatile" market conditions.
It comes after a week in which a raft of leading fund managers said they will reject the listing - which could be the UK's biggest for a decade - amid concerns over workers' rights.
The takeaway delivery firm is set to announce its final pricing on Wednesday morning but has narrowed its share price range to between GBP3.90 and GBP4.10 per share.
The pound was quoted at USD1.3790 at the London equities close, flat from USD1.3795 at the London equities close on Friday.
The euro stood at USD1.1761 at the European equities close, down from USD1.1796 late Friday. Against the yen, the dollar was trading at JPY109.77, up from JPY109.60 late Friday.
Stocks in New York were lower at the London equities close as investors digested news reports that Bill Hwang's Archegos Capital Management had unwound big bets late last week after facing margin calls.
The DJIA was down 0.4%, the S&P 500 index down 0.6% and the Nasdaq Composite down 0.8%.
Top global banks Nomura of Japan and Switzerland's Credit Suisse warned Monday they could face significant losses following reports of their exposure to US fund Archegos which sold billions in stocks last week.
Neither bank named the client but the warnings follow a Bloomberg News report that a little-known fund sold more than USD20 billion in stocks from US media and Chinese companies listed in New York on Friday.
Among the companies sold were top Chinese names such as Baidu, Tencent Music Entertainment Group and Vipshop Holding - all under pressure at home as Beijing reins in the tech sector - plus US giants such as ViacomCBS and Discovery.
The share prices all plunged as a result, reportedly causing Archegos Capital Management to seek fresh funding.
On Monday, Nomura shares plunged by 16% in Tokyo after it warned of a potential USD2 billion loss while Credit Suisse shed 14% in Zurich. Investor concerns drove down stock prices of other European banks.
UBS Group lost 3.6% in Zurich and Deutsche Bank closed down 3.5% in Frankfurt.
The unusually large sale by Archegos Capital Management, which looks after businessman Hwang's fortune, was carried out directly by major houses Morgan Stanley and Goldman Sachs.
US banks Morgan Stanley and Goldman were down 3.6% and 1.6% respectively in New York.
"Rumours continue to swirl about exactly which companies have been caught up in the Archegos saga and how badly. So far, it's the investment banking sector bearing the brunt with Morgan Stanley and Goldman Sachs both trading down," said AJ Bell's Danni Hewson. "There are already questions being asked about why so called 'family offices' are exempt from much of the scrutiny enjoyed by hedge funds and calls for the system to be tightened. With the numbers quoted today suggesting as much as USD6tn is currently under the management of such firms, there is the expectation change must come quickly."
Brent oil was quoted at USD63.85 a barrel at the equities close, down from USD64.35 at the London close Friday, after the Ever Given container ship blocking the Suez Canal refloated.
Television footage showed tugboat crews sounding their foghorns in celebration after the Ever Given, a cargo megaship the length of four football fields, was dislodged from the banks of the Suez.
The breakthrough followed what appeared to be a setback and came moments after the ship had temporarily settled back into the diagonal position it had been stuck in after running aground last Tuesday.
Maritime data company Lloyd's List said the blockage had held up an estimated USD9.6 billion worth of cargo each day between Asia and Europe.
Gold was quoted at USD1,711.45 an ounce at the London equities close, lower against USD1,733.46 late Friday.
The economic events calendar Tuesday has Japan unemployment data overnight and Germany inflation readings in the afternoon.
The UK corporate calendar on Tuesday has annual results from soft drinks maker AG Barr. There are also trading statements from utility Pennon Group and tobacco firm Imperial Brands.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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Barratt Developments (BDEV)
Renishaw (RSW)
BT (BT.A)