19th Feb 2019 11:52
LONDON (Alliance News) - It was another subdued session for stocks in London on Tuesday, with HSBC Holdings weighing on the FTSE 100 after a soft set of annual figures."Global markets have failed to gain any traction today, as news of further US-China trade talks failed to inspire stocks both in Asia and Europe," commented IG market analyst Joshua Mahony.The FTSE 100 was 50.51 points lower, or 0.7%, at 7,168.96 on Tuesday at midday. The mid-cap FTSE 250 was down 99.24 points, or 0.5%, at 19,028.04, and the AIM All-Share index was flat at 907.80.The Cboe UK 100 index was down 0.7% at 12,171.80, while the Cboe UK 250 was down 0.3% at 16,944.55 and the Cboe UK Small Companies down 0.1% at 11,212.62.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were down 0.5% and 0.2% respectively at midday.UK wage growth and the unemployment rate remained steady in the three months to December, the Office for National Statistics showed on Tuesday, with earnings continuing to outpace inflation.Average weekly earnings including bonuses rose by 3.4% on a year-on-year basis in the October-to-December period, falling slightly short of consensus forecasts of 3.5% but matching the pace reported for the three months to November.UK consumer price inflation, released last week, rose 1.8% in January, slowing from a 2.1% rise in December, meaning wages are outpacing inflation by more than a full percentage point.The unemployment rate for the October to December period held steady at 4.0%, the lowest since 1975 and matching consensus forecasts. "While wage growth and claimant figures fell short of estimates, it is worth putting this in some context, with unemployment at the lowest level since 1975 and average earnings growth the highest since 2010. For all the weakness evident throughout the latest PMI and growth figures, the jobs market remains buoyant in a historical context," said IG's Mahony.The pound was quoted at USD1.2920 at midday, soft compared to USD1.2933 late Monday.Elsewhere in the UK, Brexit Minister Lord Callanan has insisted the March 29 Brexit date will be met despite Jean-Claude Juncker's suggestion that Britain could still be in the bloc for May's European elections.European Commission President Juncker said he could not rule out an extension to the Article 50 process resulting in the UK participating in the European Parliament vote.But, arriving in Brussels for a meeting with fellow ministers, Callanan insisted Theresa May had been clear that the March 29 deadline remained.The prime minister has reportedly come under pressure from Cabinet ministers to seek an extension to Article 50 to avoid the UK crashing out of the EU without a deal. Juncker said no-one on the EU side would oppose an extension to Article 50 which kept the UK in the bloc.Meanwhile, Car giant Honda Motor confirmed plans to shut its factory in Swindon, England, in 2021 with the loss of 3,500 jobs.The Japanese company told workers it proposes to close the vehicle manufacturing plant at the end of the current model's production lifecycle.The plant currently produces 150,000 cars a year. A statement said: "This proposal comes as Honda accelerates its commitment to electrified cars, in response to the unprecedented changes in the global automotive industry."There was no mention of Brexit in Honda's statement."Granted, global car makers are battling fires on several fronts including Trump's tariffs on foreign car imports, lower Chinese demand and slowdown in demand in other regions, but with Brexit around the corner Britain is losing any advantage points in what is already a cut-throat game," commented Fiona Cincotta, senior market analyst at City Index.In London, Asia-focused lender HSBC was dragging on the FTSE 100 after its annual results missed consensus.In 2018, pretax profit widened 16% to USD19.89 billion from USD17.17 billion the year prior. This was after revenue rose 4.5% to USD53.78 billion from USD51.45 billion the year before.The reported pretax profit fell short of market expectations. Analyst consensus saw HSBC achieving pretax profit of USD20.93 billion. "These are good results that demonstrate progress against the plan that I outlined in June 2018," HSBC Chief Executive Officer John Flint said. HSBC shares were 3.9% lower at midday.Miner BHP Group declined 1.0% as it said unplanned outages in both Australia and Chile are set to lead to flat annual production and generated a profit lower than analysts had expected.BHP is guiding for copper equivalent production in its year ending June to be flat, with output in the first half of its current year also broadly unchanged on the year. Reporting its interim figures on Tuesday, BHP's pretax profit grew 4.5% on the year to USD6.80 billion as revenue rose 1.0% to USD20.74 billion.This revenue was slightly ahead of market consensus of USD20.69 billion of revenue. BHP's underlying attributable profit from continuing operations was USD4.03 billion, 8% lower year-on-year, and short of consensus of USD4.21 billion. Among the blue-chip gainers, Centrica was 1.7% higher as unit British Gas became the fourth "big six" supplier to announce it is to raise the cost of its standard variable tariff to match Ofgem's price cap.The 10% price hike from April 1 will affect around four million British Gas customers who will see their bills rise to an average GBP1,254 to meet the regulator's latest cap.Ofgem announced on earlier in February that it would increase the price cap for default and standard variable gas and electricity tariffs by GBP117 to GBP1,254 a year from April 1 due to hikes in wholesale costs.British Gas follows E.ON, EDF and npower, who all announced last week that they would be raising their prices to match the cap.FTSE 250 constituent Greggs rose after the reception to its vegan sausage roll range resulted in the baker boosting its profit guidance.For the seven weeks to February 16, Greggs' sales increased 14% year-on-year. On a like-for-like basis, company-managed shop sales rose 9.6%.This "exceptionally strong" start builds on what Greggs said was a good finish to 2018, and has been helped by "extensive" publicity around its vegan sausage roll, which was launched at the start of January."It's unclear how much of the boom can be attributed to sales of actual vegan rolls rather than simply the publicity associated with the launch. However catering for vegan diets is now rising up the priority list for many food retailers, with M&S recently launching its new vegan range," said Laith Khalaf, senior analyst at Hargreaves Lansdown. Khalaf continued: "This isn't just a flash in the pan for Greggs either, it builds on strong performance last year, and demonstrates it's still possible for bricks and mortar retailers to earn a crust on the UK high street."Transport operator FirstGroup rose 2.2% as it reported a steady year-to-date performance. Year-to-date reported revenue has increased 14%, with constant currency revenue, excluding its South Western Railway franchise, up 5.5%. The company's Road divisions revenue is up 1.9% year-to-date.FirstGroup said its overall trading in the period supports its unchanged outlook for the full year.First Bus like-for-like passenger revenue was up 1.4% year-to-date and increased 1.3% in the period from September to January. First Rail like-for-like passenger revenue rose 5.0% in the year-to-date and increased 4.2% in the period from September to January. In the US, stocks are due for a lower open following the Presidents' Day holiday on Monday. The Dow Jones is called 0.1% lower, while the S&P 500 is seen down 0.2% and the Nasdaq set to slide 0.1%.In the US corporate calendar are earnings from retailer Walmart before the market opens, while the the economic calendar is API weekly crude oil stocks at 2130 GMT.
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HSBC HoldingsGreggsCentricaFirstgroupBHP Group