UPDATE 2-European stocks rise, Credit Suisse tumbles
(For a live Reuters blog on the US, UK and EU stock markets, click LIVE / or type LIVE / in a news window)
* Credit Suisse to three-month low after reporting losses
* Energy, travel stocks fall due to virus issues
* CD Projekt exceeds STOXX 600 on leaked Cyberpunk 2077 DLC plans (adds analyst comments, updates pricing throughout)
By Devik Jain and Shreyashi Sanyal
March 29 (Reuters) – European stocks rose slightly in a choppy session on Monday, weighed down by Credit Suisse shares, which collapsed on warning of “large” losses resulting from exiting positions after the default US hedge fund Archegos on margin calls.
The Swiss bank slipped 13.8% to its lowest level in three months, saying the unnamed hedge fund defaulted on margin calls made last week by Credit Suisse and other banks and said that if it were “premature to quantify” the resulting loss, “it could be highly significant and significant to our first quarter results.”
“It is not known if Archegos is done with its fire sales, and if not, how much is left to unload,” said Connor Campbell, analyst at Spreadex.
“It also raises questions about the broader ramifications of the hedge fund’s problems, and which companies will be next to report they’ve been bitten.”
The broader financial services index was the worst performer, losing 1.9%, while the banking sector, which includes Deutsche Bank and UBS, also slipped 0.9%.
The pan-European STOXX 600 index edged up 0.2%, with mining, oil and gas, travel and leisure-related stocks among the biggest declines, with French doctors warning that a third wave of infections could soon overwhelm hospitals.
Chancellor Angela Merkel also urged German states on Sunday to step up efforts to curb the rapid rise in coronavirus infections, and raised the possibility of introducing curfews in an attempt to contain a third wave.
The benchmark STOXX 600 has lagged behind its US counterpart in the past six months as further bottlenecks on the continent and a slower-than-expected vaccination schedule have shaken Europe’s economic outlook.
The export-heavy German DAX rose 0.5% to a record high, with data over the weekend showing annual profits of Chinese industrial companies surged in the first two months of 2021, highlighting a rebound in the country’s manufacturing sector.
Among other shares, Hugo Boss slipped 1.6% after the German fashion house was embroiled in a concerted boycott by Chinese celebrities and consumers over Western accusations of forced labor in Xinjiang.
Poland’s CD Projekt jumped 13.1% to the top of the STOXX 600 after plans for the studio’s downloadable content for its Cyberpunk 2077 game leaked on Reddit.
Gains in defensive sectors such as food and beverage utilities, media, which tend to decouple from the business cycle, provided some support to the market. (Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru, editing by Shailesh Kuber and Matthew Lewis)