By Patrick Munnelly, Market Analyst, Tickmill
The FTSE 100 kicked off a holiday shortened trading week in the green. However, the weight from losses in BP LON:BP. and Shell LON:SHEL weighed on the broader index and Pearsons double digit drop did little to help the general mood as a post holiday hangover has developed through the day, Wall Street is also witnessing a fresh round of selling which is souring risk sentiment further as the FTSE limped into the close with losses of just over 1%, finishing the day at 7773.03 points.
FTSE-100 biggest movers
The early gains were led by banking heavyweight HSBC LON:HSBA +3.5%. The upside was supported by a robust earnings report that demonstrated a quarterly profit that had tripled quarter over quarter, exceeding analysts expectations. The rise in income was driven by the elevated rates environment which led the bank to issue a quarterly dividend for the first time since 2019.
Home Builder Persimmon LON:PSN has pipped HSBC to the top spot on the day as a modest improvement in housing market data led investors to pile in with the stock gaining over 5%.
BP also announced profits of $5 billion for the the first quarter of 2023 which represents an improvement on last quarters record performance. The business continues to see outperformance from its oil and gas trading units. However, BP also announced a paring in its share buyback programme, reducing the proposed share acquisition schedule to $1.75 billion for the quarter ahead. This led to disappointment amongst investors with the stock sliding -8.5% on the session with Shell shedding -4.2% on sector related performance concerns as crude oil prices continue to weaken.
The standout underperformer on the session was educational publisher Pearson Plc LON:PSON with shares slashed by -15%. The losses came as US online education provider Cheg saw a 40%+ decline in shares on reports that AI tool ChatGPT may eat into the company’s revenues as students take advantage of the free alternative. This has led to a sharply negative revaluation of Pearson’s prospects.
