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Europe Markets: Banks tumble after U.S. fund wilts

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Shares of Europe’s largest banks dropped on Monday after extending credit to a major client that couldn’t meet its obligations.

A margin call triggered on Friday of U.S. investor Archegos Capital Management continued to ripple through markets. Nomura
8604,
-16.33%

shares skidded 16% in Tokyo after it said it had a claim of $2 billion against a U.S. client, while Credit Suisse
CSGN,
-13.35%

fell 14% in Zurich after it said a U.S. hedge fund defaulted on margin calls.

Deutsche Bank
DBK,
-4.14%
,
which according to The Wall Street Journal also unwound Archegos trades, fell 5%, and UBS
UBSG,
-3.70%

shares fell 4%.

In premarket trade, Goldman Sachs
GS,
-0.96%

and Morgan Stanley
MS,
-0.19%

each fell 3%.

French banks BNP Paribas
BNP,
-2.09%

and Société Générale
GLE,
-1.75%

each fell over 2%.

Archegos holdings that were sold to meet margin calls included positions in U.S. media companies ViacomCBS
VIAC,
-27.31%

and Discovery
DISCA,
-27.45%
,
and Chinese internet companies Baidu
BIDU,
+1.97%
,
Tencent Music
TME,
-1.28%

and Vipshop
VIPS,
-2.38%
.

More broadly, the Stoxx Europe 600
SXXP,
+0.29%

inched up 0.1% while U.S. stock futures
ES00,
-0.41%

declined.

“Last week’s back and forth battle between the recovery optimists and the lockdown fretters ended with the bulls regaining the upper hand, and many global equity markets begin this Easter-shortened week within striking distance of their recent, or in some cases all-time, highs,” said Ian Williams, strategist at U.K. broker Peel Hunt.

The Ever Given container ship was refloated, an important step in unclogging the Suez Canal, which now has a backlog of 450 ships.

Europe Markets: Banks pressured after U.S. fund wilts

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