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| | London Market Report |  | | FTSE 100 | Euronext | Dax perf | CAC 40 |  |  |  |  | | Please click on the images to view our interactive charts | | | London close: HSBC dampens sentiment as investors wait on Greek news A plunge in the share price of HSBC, falling commodity stocks and a lack of news regarding Greece ensured that UK equity markets remained in the red on Monday, with investors cautious with shares near all-time highs.
HSBC dropped nearly 5% after the global lender missed forecasts with a sharp drop in profits for 2014, while stocks in the mining and oil sectors were tracking commodity prices lower.
The FTSE 100 finished 0.04% lower at 6,912.16, pulling back swiftly after reaching a high of 6,943.61 following the HSBC results announcement shortly after the open. The index briefly surpassed its all-time closing high of 6,930.20 reached in December 1999, but failed to exceed the intraday record of 6,950.60.
"It was yet another sleepy Monday for the markets, as a slow news day left investors struggling to find a reason to buy," said analyst Connor Campbell from Spreadex.
"The FTSE spent its day largely being crippled by the triple threat of falling oil stocks, a struggling mining sector and the HSBC dilemma."
Investors spent most of the day waiting on an announcement from Athens. Greece was expected to submit details on its reform and budgetary measures it plans to take as part of its four-month bailout extension agreed on Friday with Eurogroup leaders.
"We expect it to be approved but probably not until after market close in Europe. If the programme is not approved, there will be an extraordinary Eurogroup finance minister meeting tomorrow," said analysts at Danske Bank.
HSBC and commodity stocks weigh on markets
HSBC reported a 17% drop in pre-tax annual profit to $18.68bn for 2014, compared with the $21.5bn consensus forecast, after being hit by fines for its involvement in the foreign exchange-rigging scandal.
Chairman Douglas Flint said recent revelations about its Swiss arm offering tax evasion advice have brought "shame" on the bank. Meanwhile, chief executive Stuart Gulliver was forced to fend off accusations by The Guardian that he himself had sheltered millions of pounds of his own money in a Swiss account.
Other banking stocks were mixed, with emerging markets-focused peer Standard Chartered falling sharply, but RBS, Barclays and Lloyds edging higher. Lloyds advanced after the UK government reduced its stake in the lender to below 24% with the sale of ?500m worth of shares.
Miners such as Anglo American, Rio Tinto, Antofagasta, Fresnillo, BHP Billiton and Randgold Resources were registering heavy losses by the close. Chilean copper miner Antofagasta fell despite trimming its cash cost guidance for 2015, while Rio Tinto was dampened by a downgrade to 'neutral' by UBS.
Primark owner and food ingredients group Associated British Foods rose after saying that underlying trading in the first half has been in line with expectations. While profits for the full year are forecast to fall, first-half adjusted earnings should be flat, it said.
Distribution group Bunzl impressed with its its full-year results, revealing a 3% increase in pre-tax profit and a 10% hike in the dividend. |
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| | Market Movers
techMARK 3,157.86 +0.65%
FTSE 100 6,912.16 -0.04%
FTSE 250 17,167.98 +0.27% FTSE 100 - Risers
G4S (GFS) 293.20p +3.28%
easyJet (EZJ) 1,798.00p +2.63%
Shire Plc (SHP) 5,190.00p +2.47%
Admiral Group (ADM) 1,496.00p +2.26%
International Consolidated Airlines Group SA (CDI) (IAG) 562.00p +2.00%
British American Tobacco (BATS) 3,727.50p +1.96%
London Stock Exchange Group (LSE) 2,506.00p +1.83%
Schroders (SDR) 3,074.00p +1.75%
SABMiller (SAB) 3,660.00p +1.68%
3i Group (III) 490.00p +1.62%
FTSE 100 - Fallers
Standard Chartered (STAN) 928.10p -4.66%
HSBC Holdings (HSBA) 577.20p -4.63%
Anglo American (AAL) 1,198.00p -3.89%
Tullow Oil (TLW) 392.10p -3.73%
Intertek Group (ITRK) 2,461.00p -3.38%
Fresnillo (FRES) 802.50p -2.96%
Antofagasta (ANTO) 732.50p -2.79%
Rio Tinto (RIO) 3,150.50p -2.69%
BHP Billiton (BLT) 1,547.00p -2.15%
Randgold Resources Ltd. (RRS) 4,921.00p -1.87%
FTSE 250 - Risers
Smith (DS) (SMDS) 360.30p +3.77%
UDG Healthcare Public Limited Company (UDG) 455.60p +3.24%
Bank of Georgia Holdings (BGEO) 1,960.00p +3.16%
Pace (PIC) 335.50p +2.91%
Dechra Pharmaceuticals (DPH) 935.00p +2.86%
Essentra (ESNT) 990.00p +2.80%
Marston's (MARS) 153.40p +2.75%
Barr (A.G.) (BAG) 684.00p +2.70%
Galliford Try (GFRD) 1,495.00p +2.68%
Grainger (GRI) 211.50p +2.52%
FTSE 250 - Fallers
Polymetal International (POLY) 562.50p -5.78%
Acacia Mining (ACA) 268.00p -5.30%
AL Noor Hospitals Group (ANH) 948.00p -5.20%
Ophir Energy (OPHR) 135.90p -5.16%
Ladbrokes (LAD) 115.70p -5.16%
Premier Oil (PMO) 168.50p -4.96%
Hunting (HTG) 466.50p -4.05%
Vedanta Resources (VED) 574.00p -4.01%
Petrofac Ltd. (PFC) 793.50p -3.41% |
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| | Europe Market Report | | | | FTSE 100 | Euronext | Dax perf | CAC 40 |  | | | | | | Europe close: Stocks mostly higher as Greece prepares to submit list of reforms to Eurozone creditors European stocks were mostly higher as Greece drafted a list of reforms to appease Eurozone creditors.
Greek had until the end of Monday to submit a list of policy measures in order to receive a four-month extension to its bailout, which is due to end on 28 February.
The list reportedly has three pages of draft proposals including policies aimed at improving tax revenue and tackling tax evasion.
The measures will be formally evaluated by the European Commission, European Central Bank and International Monetary Fund. A meeting will be held on Tuesday if the list of reforms is not approved.
"The monitoring institutions need to approve the policy programme submitted by the Greek government for the agreement reached on Friday to be effective," said Dankse Bank.
"We expect it to be approved but probably not until after market close in Europe. If the programme is not approved, there will be an extraordinary Eurogroup finance minister meeting tomorrow."
In Germany, a report showed business confidence declined. The Ifo's business climate index dropped to 106.8 from 106.7, surprising analysts' who had expected a reading of 107.7.
The euro fell 0.35% to $1.1341.
The US saw the release of existing home sales data which revealed a 4.9% drop to 4.82m units in January, worse than the 1.8% decline that was predicted and compared to the previous month's 2.4% increase.
On another downbeat note for markets, Brent crude fell 0.9% to $59.68 per barrel at the end of trading, according to the ICE, in the wake of concerns about an oversupply in North America.
HSBC slides after FY results disappoint
HSBC dragged the FTSE 100 lower after reporting a 17% decline in annual pre-tax profit after paying for fines.
Lloyds Banking Group advanced after the UK government reduced its stake in the lender with the sale of 500m of shares.
PostNL NV advanced after the Dutch company reported better-than-forecast 2014 revenue.
Distribuidora Internacional de Alimentacion SA gained after the Spanish discount grocer said it will buy back as much as €200m of its own shares. |
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| | US Market Report | | US open: Dow down over 80 point as tumbling oil prices weigh on stocks US stocks declined on Monday as tumbling oil prices weighed on energy stocks.
Just before 10:00 in New York, the Dow Jones Industrial Average was 81.27 points down, while the S&P 500 dropped 4.51 points, though the Nasdaq gained 2.23 points.
Oil prices continued to fall, with West Texas Intermediate losing almost 3.5% to just over $49 a barrel, while Brent crude dropped almost 2.5% to just under $59 a barrel.
The only economic data released on Monday is existing home sales in January which is expected to see a slight drop to 5.03m from 5.04m in December.
Investors are therefore likely to focus on Federal Reserve's chair Janet Yellen, who will give her testimony on the economy and monetary policy to Congress on Tuesday and Wednesday, with investors set to look out for comments on the Fed's interest rate policy.
On Friday, Wall Street registered late gains driven by news that Eurozone ministers had agreed to extend Greece's bailout.
However, Athens must present a list of cuts and economic reforms by Monday, which will then have to be approved by the International Monetary Fund and by the European Union.
"US equities largely outperformed those in Europe for the first three weeks of February, snapping back sharply from a downturn in January," said Jasper Lawler, analyst at CMC Markets.
"Now that the situation in Greece is set to calm down for a few months while a longer term solution is reached, there is chance that Europe will again attract a bigger chunk of flows.
"More flows into Europe could leave US markets susceptible to lost upward momentum and perhaps even another downturn as was seen in January."
In corporate news, Valeant surged after announcing on Sunday that it will buy Salix in a deal worth $10bn in cash, while Apple edged forward after revealing it will invest $1.92bn to build two data centres in Europe.
Hi-tech group Polypore International jumped after sector peer 3M said it would pay $1bn for its separations media business. |
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| | Broker Tips | | Broker tips: HSBC, Glencore, Rio Tinto, Bovis Homes, LSE An uncertain outlook at HSBC is likely to keep the market cautious about the global lender, according to Hargreaves Lansdown Stockbrokers, after 2014 results on Monday came in below forecasts.
Head of equities Richard Hunter said: "Given the wider sectoral issues, HSBC has had a difficult year, with the shares having dropped 7% over the last 12 months, as compared to a 1.5% hike for the wider FTSE100 in that period. With so much fog remaining, the outlook remains less visible than investors would wish, and the market consensus for the shares as a 'hold' is likely to remain intact for the time being."
UBS has lifted its rating for Glencore from 'neutral' to 'buy', saying the commodities trader and mining group is well positioned for a cyclical recovery.
However, sector peer Rio Tinto has been hit by a downgrade by UBS from 'buy' to 'neutral' on the back of a "challenging" price outlook and lack of near-term catalysts.
Strong annual results from housebuilder Bovis Homes received a lukewarm reaction from the market on Monday as they broadly met forecasts, though broker Panmure Gordon chose to reiterate its 'buy' rating saying that the shares remain cheap.
Analyst Rachel Applegate said: "We maintain our belief that Bovis is fundamentally undervalued at current levels, and the stock is our key housebuilding pick."
Numis Securities has lifted its target for London Stock Exchange Group (LSEG) by 11% to reflect the integration of the Russell Index business which was acquired through the Frank Russell takeover last year. | | |
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