HSBC heads banking gains as FTSE surges two per cent higher

The FTSE100 is gaining in the region of two per cent this morning with banking stocks thrusting the blue chip index higher. HSBC Holdings (LON:HSBA) is the stock of the day so far after the bank reported a double in interim profit year-on-year. And the rest of the sector is being buoyed by strong results from French bank BNP Paribas.

Rob Hull
shareprices.com - Monday, August 02, 2010

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HSBC Holdings reported a double in interim profits

HSBC has posted gains as high as 5.4 per cent after releasing an interim earnings report earlier today.

The headlining point of the statement was an interim profit figure of $11.1bn (£7bn) – more than double the figure for the same period last year.

The improvement was boosted by impairment charges declined to a new low since the start of the financial crisis to $6.4bn from $7.5bn.

Earnings per share rose 81 per cent to 38 cents and a dividend of $0.16 cents per share was confirmed.

The results were enough to push the banking group’s share price over 34p higher this morning, posting a session high of 680.90p just before 10:00BST.

The rest of the banking sector took confidence from HSBC’s gains, but also found more comfort from reports emerging from overseas.

With eurozone debt fears crippling banking stocks in recent months, an above forecast half-year report from French bank BNP Paribas improved investor sentiment about banks.

Both Royal Bank of Scotland (LON:RBS) and Lloyds Banking Group (LON:LLOY) are over three per cent higher on the back of the news.

Also posting substantial gains are miners following weakened manufacturing data from China.

Investors have feared China might take strict measures to cool economic growth, restricting the number of deals with British-listed mining companies that do the majority of their trade with the Far East.

But with manufacturing slowing, investors have moved quickly to buy into mining stocks as demand is expected to continue.

Vedanta Resources (LON:VED), Kazakhmys (LON:KAZ) and Antofagasta (LON:ANTO) are the top three stocks, up between 4.5 per cent and 3.9 per cent.

And Lonmin (LON:LMI), Anglo American (LON:AAL), BHP Bilton (LON:BLT), Xstrata (LON:XTA) and Rio Tinto (LON:RIO) are also making gains in excess of three per cent.

Just three stocks are in negative territory just before 10:30BST, guaranteeing the FTSE is making good headway in the session.

The FTSE100 is currently 1.97 per cent up at 5,361.43 with a gain of 103 points.

 

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