Key Points
- FTSE 100 closing price of 6737.00, -0.05%
- Banks warn of losses after hedge fund sell-off
- Ever Given ship re-floated, Suez Canal traffic resumes
- Bitcoin jumps as Visa (NYSE:V) conducts settlement transaction in USD coin
- EUR/GBP hits lowest since Feb 2020
By Samuel Indyk
Investing.com – The FTSE 100 finished the day relatively flat as a jump in BT shares offset a decline in gambling names. Some homebuilders were weak after a note from JPMorgan on the sector. The US bank downgraded Barratt Developments (LON:BDEV) and maintained Crest Nicholson (LON:CRST) with an underweight rating.
BT Group PLC (LON:BT) was the best performing company in the blue-chip index after the company was upgraded by Morgan Stanley. Separately, in an interview with the Sunday Telegraph, former Barclays (LON:BARC) UK boss Sir Ian Cheshire threw his hat in the rig for the open chairman position at the company. Cheshire has been on the board at BT since March last year.
Certain banks across the globe came under selling pressure after announcing they face large losses in the wake of the unwinding of leveraged equity trades at Archegos Capital Management. The family office failed to meet margin calls last week, forcing the liquidation of more than $20bln of positions linked to Archegos and the company’s lenders are feeling the brunt. Nomura Holdings Inc (T:8604) shares fell by the most on record and Credit Suisse (SIX:CSGN) said losses would be significant.
Traffic in the Suez Canal resumed on Monday afternoon after the Ever Given container ship was re-floated, having been stuck in the canal since Tuesday last week. The backlog of ships included container ships, bulk carriers, oil tankers and Liquified Natural Gas or Liquified Petroleum Gas vessels. Shipping company Maersk estimated the knock-on impact could take weeks or months to unravel.
WTI and Brent crude futures both declined after initial reports of re-floating in the early hours of the European morning but oil is still set to gain in Q1, the fourth consecutive positive quarter for oil.
Bitcoin jumped back above $58,000 after Visa announced they would be settling payments using the USD Coin cryptocurrency. Although the news was not specific to the world’s largest cryptocurrency, further corporate acceptance of digital assets supported the cryptocurrency space as a whole and Bitcoin’s market cap was back above $1tln.
GBP was relatively flat against the USD and EUR but not after an early bout of strength saw EUR/GBP drop to its lowest since February last year, before finding support ahead of 0.8500. Of note, Japanese financial services firm MUFG entered a long GBP/SEK position saying the fundamental case for a stronger GBP remains in place in the near term.
Looking ahead
Royal Mail (LON:RMG) and Imperial Brands (LON:IMB) will both announce results tomorrow. On Wednesday the UK releases revised GDP figures for Q4 and Thursday sees the final manufacturing PMI release for March.