ADVFN Morning London Market Report: Monday 29 March 2021

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London open: Stocks little changed as restrictions ease


London stocks were little changed in early trade on Monday as investors weighed up recovery hopes against the fallout from Archegos’s fire sale.

At 0800 BST, the FTSE 100 was 0.1% lower at 6,731.10.7 as lockdown eased in England, with groups of six people or two households now allowed to meet outdoors.

Spreadex analyst Connor Campbell said: “The FTSE failed to celebrate the first step of the UK’s spring awakening, trickling 10 or so points lower, dropping to 6,730, while the pound was equally unenthused, flat against dollar and euro alike.”

He said this early reticence could be tied to the Archegos Capital situation.

“Friday saw significant losses for ViacomCBS, Discovery, and a selection of Chinese tech stocks, without immediate explanation, Campbell said. “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.

“It is unclear whether Archegos is done with its fire sales, and, if it isn’t, how much it has left to unload. That also raises questions over the wider ramifications of the hedge fund’s troubles, and which companies will be the next to announce they have been stung.”

Overall, however, the general mood was holding up well given the Archegos news, with sentiment underpinned by recovery hopes.

Richard Hunter, head of markets at Interactive Investor, said: “Renewed optimism on economic recovery is lifting all boats as investors continue to gauge those sectors most likely to benefit.

“The late surge in US markets was across the board at the end of last week, but value stocks in particular saw specific buying interest. There was also evidence of a boost to retail as consumers begin to spend their stimulus cheques and, as restrictions ease, the likelihood of the release of pent-up demand accelerates.”

In equity markets, financial services platform AJ Bell rose after it lifted full-year revenue guidance as it continued to see rising customer numbers in the first half. The company said it expected revenue for the 12 months to September 30 to be at least £6m higher than its own compiled forecasts of £136m.

In broker note action, BT Group was among the top gainers after an upgrade to ‘overweight’ at Morgan Stanley, while housebuilder Barratt Developments was knocked lower by a downgrade to ‘neutral’ at JPMorgan.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Hiscox Ltd +1.89% +15.60 841.00
2 Rentokil Initial Plc +1.56% +7.60 494.80
3 Bt Group Plc +1.49% +2.20 150.25
4 Hargreaves Lansdown Plc +1.44% +22.00 1,545.50
5 Severn Trent Plc +1.39% +32.00 2,331.00
6 United Utilities Group Plc +1.21% +11.00 918.40
7 Reckitt Benckiser Group Plc +1.13% +72.00 6,444.00
8 Coca-cola Hbc Ag +0.87% +20.00 2,325.00
9 Smith & Nephew Plc +0.85% +11.50 1,370.50
10 Marks And Spencer Group Plc +0.84% +1.30 155.15


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Smiths Group Plc -2.76% -43.00 1,517.00
2 Flutter Entertainment Plc -2.21% -365.00 16,115.00
3 International Consolidated Airlines Group S.a. -2.14% -4.20 192.15
4 Persimmon Plc -2.02% -61.00 2,960.00
5 Glencore Plc -2.01% -5.75 280.65
6 Itv Plc -2.00% -2.55 125.00
7 Barratt Developments Plc -1.95% -15.00 755.60
8 Informa Plc -1.84% -10.40 556.20
9 Compass Group Plc -1.79% -26.50 1,455.50
10 Vodafone Group Plc -1.76% -2.38 133.00


Europe open: Shares higher on strong Wall Street, economic recovery hopes

European shares opened higher on Monday, on the back of a strong Wall Street performance and hopes of an accelerated Covid vaccine rollout with the Moderna jab now available.

Investors were keeping a wary eye on the row between AstraZeneca and the EU over vaccine provision with the 27-member bloc threatening to block the pharma giant exporting any does until it met contractual promises on supply.

“The virus situation in Europe continues to deteriorate and Germany delaying the EU Recovery Fund will not help the zones economic position,” said Rony Nehme, chief market analyst at Squared Financial.

“The market is still long but the story of US outperformance on the back of a swift vaccine roll out while Europe lags behind is becoming stronger. Equities were volatile at the end of last week and we expect the same again this week – which will be shortened with the Good Friday holiday – as we see funds managing their quarter end positioning.”

Oil prices fell as the cargo ship blocking the Suez Canal was partially refloated, raising hopes the vital route could re-open and allow backed-up container traffic to get through.

“The oil price has of late been drifting on concerns that hopes for the resumption of demand has been overstated, although it remains strongly ahead by 22% so far this year,” said Richard Hunter at interactive investor.

In equity news, Credit Suisse shares fell almost 9% after the bank warned of “significant” losses from exiting positions after a unnamed US-based hedge fund defaulted on margin calls.


Monday newspaper round-up: Liberty Steel, Amigo, Arcadia Group

Concerns for the future of Liberty Steel and its 3,000 UK workers have grown after the government rejected its parent company’s plea for a £170m rescue loan. The rejection has added to the pressure on Liberty Steel, part of the business empire built up by the industrialist Sanjeev Gupta. Gupta has been urgently seeking extra funding for the business in the three weeks since the collapse of a key financial backer, Greensill Capital. – Guardian

The City watchdog is under pressure from cross-party MPs to explain why it is allowing the sub-prime lender Amigo to push ahead with a rescue plan that will cap compensation payments for nearly 1 million customers, while giving executives the chance to earn £7m in long-term bonuses. The shadow City minister, Pat McFadden, and the head of the Conservative-led Treasury committee, Mel Stride, said the Financial Conduct Authority had questions to answer about how it was regulating firms like Amigo, and whether it is was fulfilling its obligation to protect consumers. – Guardian

After a year of rolling lockdowns and shuttered offices, light and airy housing has never been more important to Britain’s legions of city dwellers. Alongside the old staples of a lively local high street, good pub and short commute, a new box has been added to typical home-hunter’s checklist – how much sun their property lets in. But the demand for natural light is threatening to put occupiers at odds with developers at a time when space is at a premium and planning reform is seen as essential to solve the country’s housing crisis. – Telegraph

Sir Philip Green’s failed Arcadia empire is to sell off furniture and fittings at its distribution and data centres in a bid to raise cash for creditors. The move follows what clearance company Hilco called a “healthy response” to a two-day auction for furniture and equipment at Arcadia’s headquarters in London. Hilco is overseeing the sale to raise millions of pounds for those owed cash by Arcadia. – Telegraph

A plan by the London Metal Exchange to abandon its trading floor could risk its status as the leading price-setting venue in the global metals market, a leading broker has warned. The Ring is the last open outcry market in Europe, but its future is in doubt after the exchange revealed in January that it was planning to close the trading venue in favour of electronic pricing. – The Times


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