Investors brace for fallout after hedge fund default reportedly triggered $20 billion fire sale of stocks - Financial Post

With a number of banks said to be exposed to Archegos, investors are on the lookout for signs of contagion

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Bloomberg News

Andreea Papuc and Srinivasan Sivabalan

Contracts on the S&P 500 declined along with Nasdaq 100 futures following revelations that Archegos Capital Management LLC — the family office of Bill Hwang — was behind a $20 billion spree of block trades on Friday. Photo by Angela Weiss /AFP via Getty Images

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U.S. equity-index futures fell as traders braced for a fallout from forced block trades that took the shine off a record Wall Street close. European and Asian shares rose, while oil slid after the ship blocking the Suez Canal was refloated.

Contracts on the S&P 500 declined along with Nasdaq 100 futures following revelations that Archegos Capital Management LLC — the family office of Bill Hwang — was behind a $20 billion spree of block trades on Friday, selling Chinese tech giants and U.S. media firms. With a number of banks said to be exposed to Archegos, investors are on the lookout for signs of contagion.

Premarket trading in New York suggested pain for stocks connected with the event. Goldman Sachs Group Inc. and Morgan Stanley fell about 3 per cent. Media shares including ViacomCBS also declined. Discovery Inc. edged up.

Credit Suisse Group AG fell as much as 15 per cent in Europe. The Stoxx 600 gauge rose for a second day as gains for defensive sectors including food and beverages outweighed losses for cyclical sectors such as banks and travel.

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West Texas Intermediate crude slid as much as 2.6 per cent after the Ever Given was refloated in a first step to reopening the Suez Canal to traffic. A dollar gauge rose and 10-year U.S. Treasury yields slipped. European government bonds posted modest losses.

Investors are focusing on the strength of the recovery, aided by vaccines, and inflation risks. Later this week, U.S. President Joe Biden plans to unveil a further stimulus program with a tilt toward infrastructure. U.S.-China ties are also in focus, after a report that Washington isn’t ready to lift tariffs on Chinese imports in the near future, but may be open to trade talks.

These are some of the main moves in financial markets:

Stocks

Futures on the S&P 500 Index fell 0.4 per cent as of 11:08 a.m. London time. The Stoxx Europe 600 Index gained 0.3 per cent. The MSCI Asia Pacific Index increased 0.2 per cent. The MSCI Emerging Market Index climbed 0.1 per cent.

Commodities

West Texas Intermediate crude dipped 0.3 per cent to US$60.80 a barrel. Brent crude climbed 0.1 per cent to US$64.64 a barrel. Gold weakened 0.4 per cent to $1,724.93 an ounce.

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2021-03-29 10:54:54Z
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