Europe open: Shares brush off Archegos worries
European shares opened higher on Tuesday as investors shrugged off worries over the troubles at Archegos Capital and focused on the prospects of a post Covid pandemic economic recovery.
The pan-European STOXX 600 index rose 0.54% by 0841 BST with all major regional bourses on the rise. Britain’s FTSE 100 outperformed, up 0.76% to a 12-day high as banks and miners found favour. A 0.76% increase in Germany’s DAX sent the index past 14,900 for the first time.
“Though Archegos uncertainties are still hanging over the markets, European investors felt settled enough to push the region’s indices higher on Tuesday,” said Spreadex analyst Connor Campbell.
“There are dangers lurking to undermine these month-end gains. As occurred when February came to a close, bond yields are on the rise. And though the markets have broadly made their peace with that in recent weeks, it could still cause a record high-imperilling wobble.”
“Similarly, just because markets appear to have moved on this morning, doesn’t mean the dust has settled on Archego Capital’s collapse. That situation could still have some nasty surprises up its sleeve.”
Swiss lender Credit Suisse rallied 1.12% after a 14% slump on Monday as the bank warned of “highly significant and material” losses after the fund, named by sources as Archegos, defaulted on margin calls.
Spanish mobile phone mast operator Cellnex rose about 1.5% after it launched a €7bn capital raise.
Shares in British letter and parcel carrier Royal Mail were up more than 2% as the company announced a one-off dividend and said it planned to more than double profits at its GLS parcels division in the next five years thanks to a boom in online shopping during the coronavirus pandemic.
Water group Pennon fell as the company said it was on track to deliver "resilient financial results" in line with management expectations.