Once again the FTSE failed to break 7300 this morning, dipping 30 points as the day got underway. The index has been dragged lower by HSBC, which fell nearly 5% following its full year update before the bell. Profits at Britain’s largest bank plunged an eye-watering 62% to $7.1 billion, the company blaming a series of hefty one-off accounting costs. In a double whammy, HSBC also revealed it is facing another set of investigations around the globe, including money-laundering offences in the UK, while warning on the risks posed by Brexit and Trump in the coming fiscal year. This wasn’t a great start to the UK banking sector’s week of annual reports, the major players all posting notable losses after the bell, though things should pick up with the statements from Lloyds and Barclays on Wednesday and Thursday respectively.
On the flipside, in the Mining sector, Anglo American profits beat expectations while BHP Billiton returned to profitability thanks to higher commodity prices and operational improvements allowing it to boost its dividend.
Spreadex Analyst, Connor Cambell noted – “The markets are looking less chipper than they did this time yesterday morning, despite the (admittedly small amount of) progress made between Greece and its creditors at the start of the week.”
Today in focus
After drawing focus on Monday afternoon, the Eurozone will likely be the main attraction this morning, from a data perspective at least, thanks to the oncoming wave of flash manufacturing and services PMIs. The French figures have already provided a mixed bag of information, with a drop in the former countered by a rather sharp increase from the latter; Germany is meant to see a similar, if less dramatic, pattern, while for the Eurozone as a whole manufacturing is set to slip as the services reading remains unchanged. This afternoon, the US is expected gain a little ground for both segments.
Also today, the second reading of the Brexit Bill debate in the House of Lords before its heads to the committee stage and an eventual vote, with or without amendments. Speakers today include ECB vice president Constâncio who participates at the ECOFIN meeting in Brussels and BoE Governor Carney who testifies before UK Parliament’s Treasury Committee on the central bank’s latest inflation report.
ADS Securities Analyst, Jamieson Blake commented – “The Pound has been enjoying a robust performance in recent weeks which is not consistent with the recent bearish news from various sectors of the economy with Retail Sales, wages’ growth and inflation all ticking lower. As such, a potentially bearish tone from the BoE Governor combined with a fresh Dollar advance could drive the Sterling towards a more realistic rate against its US peer.”
Accendo Markets Analyst, Mike Van Dulken commented on the US open this afternoon –
“US equity markets were closed yesterday for President’s day, however futures are pointing to a marginally higher opening on Wall Street later today for the Dow Jones, S&P 500 and Nasdaq, despite the former two bourses falling back from yesterday’s early morning highs”