Market report: Metro Bank suffers as hedgies and Goldman put the boot in

Metro Bank shares took a tumble today as swanky West End hedge funds and US giant Goldman Sachs ganged up on the challenger bank.

Regent Street-based Ena Investment Capital increased its short position by 11% to 3.4 million shares, or 2% of the company’s stock.

Ena follows Marshall Wace, Odey Asset Management and Connor, Clark & Lunn Investment Management, who have also made moves over the past week, stats from the ShortTracker website show.

Not to be outdone, Goldman Sachs also stuck the boot in, downgrading the stock. The bets come as Metro is set to crash out of the FTSE 250 this month and in the wake of Vernon Hill stepping down as chairman.

It tops what has been a torrid year for Metro after the group admitted in January that many commercial loans had been incorrectly classified in an accounting error. It was then forced to ask investors for £375 million to bolster its balance sheet.

One broker said: “If the s*** hits the fan with Brexit or a downturn then the weakest will get picked off and Metro is clearly in a much weaker place than the big names.”

The shares were down 24.4p to 266p.

The main market was on the rise for the second straight session as the FTSE 100 added 8.18 points to 7346.21. The index was boosted by the miners after US President Donald Trump agreed to delay tariffs on $250 billion worth of Chinese imports.

Glencore was up 5.6p to 257p, Anglo American added 53p to 1935p and Rio Tinto climbed 91p to 4380p.

Outside the top flight, there was rotten news for N Brown after the fashion retailer demonstrated that PPI doesn’t just affect the big boys.

The retailer is a catalogues business which provides credit to its customers and had been selling PPI. This session it said it would take another £30 million hit from the scandal, sending its shares tumbling 5%, or 6p, to 104p.

John Stevenson at Peel Hunt said: “In keeping with the wider financial services sector, N Brown has seen a surge in claims volumes ahead of the deadline, with volumes up tenfold.”

But it was better news for Trainline, which floated in June, as it said ticket sales in the first six months of the year were up 19% to £1.8 billion. Its shares climbed 6%, or 29.5p, to 477p.

Babcock won a £1.25 billion contract to build five frigates at the Rosyth dockyard in Fife. The shares rose 2%, or 11.6p, to 549p.