LONDON MARKETS: FTSE 100 Sags As Investors Hesitate After HSBC, BHP Results
February 20 2018 - 04:43AM
Dow Jones News
By Carla Mozee, MarketWatch
Pound falls against resurgent dollar; Brexit speech later eyed
for any impact
U.K. blue-chip stocks edged lower Tuesday, as investors dashed
out of shares of London-listed heavyweights HSBC PLC and BHP
Billiton PLC after disappointing financial updates from the bank
and the miner.
That made for a tentative start to U.K. trading as investors in
other global equity markets returned from holidays.
How markets are moving
The FTSE 100 indexwas down 0.1% at 7,239.13, hurt by losses in
the financial and basic material groups. On Monday, the London
benchmark fell 0.6%
(http://www.marketwatch.com/story/ftse-100-wavers-after-best-week-in-more-than-a-year-2018-02-19).
The poundtraded at $1.3957, down from $1.3999 late Monday in New
York, as the dollar staged a recovery from a recent slide.
The yield on the 10-year giltwas up 2 basis points at 1.62%,
according to Tradeweb. Yields rise when prices fall.
Check out: More investors looking to cut U.K. assets as Brexit
uncertainty persists
(http://www.marketwatch.com/story/more-investors-looking-to-cut-uk-assets-as-brexit-uncertainty-persists-2018-02-16)
What's driving markets
The slight pullback at the London open came as S&P 500
futures roamed between small gains and losses, ahead of the return
of U.S. investors from Monday's Presidents Day holiday. In Hong
Kong, equities lost ground as trading resumed following the Lunar
New Year holiday. Volumes in European stock trading were thinner
than usual on Monday, affected by the holidays.
The FTSE 100 lagged other European markets as the financial and
basic materials sectors lost ground. Those declines were led
respectively by HSBC and by BHP Billiton, the world's largest
listed miner by market value. Those two sectors make up more than
33% of the benchmark's weighting.
Traders may zone in on a speech David Davis, the minister in
charge of Brexit, later Tuesday in Austria. They may watch for
clues to the government's plan for the U.K.'s withdrawal from the
European Union, as calls grow for greater clarity on issues such as
the transition period. Davis is expected to say that worries about
the U.K. entering a "'Mad Max-style world borrowed from dystopian
fiction" are unfounded.
What strategists are saying
"Ignoring all this earnings negativity, the FTSE managed to eke
out a 0.1% rise after the bell," said Connor Campbell, financial
analyst at Spreadex.
"That's likely because sterling itself was in trouble this
Tuesday: The currency fell a further 0.4% against the dollar,
leaving cable back below $1.395 for the first time in almost a week
as sterling displayed some pre-David Davis Brexit speech jitters,"
he said in a note.
Stock movers
HSBC PLC shares (HSBA.LN) (HSBA.LN) dropped 3.7% after the
Asia-focused lender missed full-year profit expectations
(http://www.marketwatch.com/story/hsbc-misses-on-profit-on-steinhoff-carillion-hits-2018-02-20).
The bank's earnings were hit by the collapses of two borrowers:
U.K. services and construction company Carillion PLC and South
African retailer Steinhoff International Holdings .
BHP Billiton PLC (BLT.LN) (BHP.AU) (BHP.AU) slumped 3.6% as
first-half profit before one-off items of $4.05 billion came in
below the $4.21 billion consensus estimate
(http://www.marketwatch.com/story/bhp-lifts-dividend-profit-falls-on-us-tax-hit-2018-02-20)
in a Wall Street Journal poll of analysts. But BHP said it would
raise its midyear payout by 38%.
InterContinental Hotels Group PLC shares (IHG) sloughed off
4.3%. The company, whose brands include Crowne Plaza and Holiday
Inn, said "no additional capital return will be paid in calendar
year 2018," so it may focus on growth plans. IHG's 2017 pretax
profit was ahead of expectations
(http://www.marketwatch.com/story/intercontinental-hotels-profit-up-lifts-dividend-2018-02-20)
and that it will raised its total dividend for the year.
(END) Dow Jones Newswires
February 20, 2018 04:28 ET (09:28 GMT)
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