By Carla Mozee, MarketWatch
Sports Direct lands ratings upgrade
U.K. stocks finished at a record high Monday, with HSBC PLC
marking its strongest session in nearly two years following a
report the company is looking at spinning off its U.K. retail
bank.
The FTSE 100 gained 0.5% to end at 7,103.98, surpassing its
previous all-time closing high of 7,096.78 it logged on April 15,
according to FactSet data.
Stocks turned higher with equities across Europe on the prospect
that Greece's tense negotiations with creditors may improve as the
team handling the talks was revamped
(http://www.marketwatch.com/story/greek-finance-minister-may-lose-influence-in-creditors-talks-2015-04-27)
by Greek Prime Minister Alexis Tsipras. There are concerns that if
Greece doesn't resolve its debt troubles, it may have to leave the
eurozone.
Banks: Back in London, HSBC jumped 3.1%, its best gain since
July 2013, after the Sunday Times reported that the lender is
weighing a deal valued at 20 billion pounds ($30.4 billion) that
would see it spin off its retail bank.
Some analysts noted that HSBC has previously denied speculation
that it will rid itself of the U.K. retail assets. What's key this
time around is it "shows that HSBC [is] considering all options to
maximize value for shareholders," said Berenberg analyst James
Chappell, in a note Monday.
"We continue to believe HSBC is undervalued considering its 6%
yield and that there has been significant change already in the
business," Chappell added.
HSBC said Friday it is thinking about moving its headquarters
out of London
(http://www.marketwatch.com/story/hsbc-considers-quitting-the-uk-2015-04-24)
as it assesses changes in the U.K. regulatory landscape. Standard
& Poor's on Monday said the U.K.'s largest four banks may have
to pay up to GBP19 billion combined over the next two years related
to past misconduct charges. HSBC, Barclays PLC , Lloyds Banking
Group PLC , Royal Bank of Scotland have already shelled out GBP42
billion in the five years to 2014, the agency said.
Read: HSBC may ditch London, but most other banks likely to stay
put
(http://www.marketwatch.com/story/hsbc-may-ditch-london-but-dont-expect-a-flood-of-lenders-to-leave-2015-04-24).
Shares of Standard Chartered PLC ended Monday's session up by
4.3%. There is been talk the Asia-focused bank is considering
moving its home base out of London. Standard Chartered is slated to
release an interim quarterly update Tuesday.
Shares of Barclays closed up 0.8%, RBS rose 0.6% while Lloyds
shares lost 0.6%.
Movers: Shares of BP PLC (BP) shares fell 0.3% after the U.K.
government told the oil giant that it would oppose any potential
foreign takeover
(http://www.marketwatch.com/story/bp-told-uk-government-would-oppose-a-foreign-takeover-2015-04-27)
of the British heavyweight. As oil prices have slid, there is been
speculation about possible deal-making involving BP. This month,
Royal Dutch Shell PLC agreed to take over BG Group PLC .
BP is expected to release its first-quarter results on
Tuesday.
Centrica shares turned higher, by 1.7%. The parent company of
British Gas said it is trading in line with guidance
(http://www.marketwatch.com/story/centrica-trading-in-line-with-guidance-2015-04-27-34853946),
with colder-than-normal weather in the U.K. and North America
leading to higher energy consumption.
Retailer Sports Direct International's shares tacked on 2% after
RBC Capital Markets raised its ratings the retailer to sector
perform, from underperform. "Although we believe consensus EPS
forecasts are too high owing to dollar-sourcing risk, valuation has
corrected to more in line with historic averages and the sector,"
RBC said.
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