19th Feb 2019 08:51
LONDON (Alliance News) - Market heavyweights HSBC and BHP weighed on the FTSE 100 index in London early Tuesday, after reporting earnings which missed market expectations, while concerns about trade wars shifted for the time being to the US and Europe from the US and China.Conversely, InterContinental Hotels led the gainers after it hiked its annual dividend. The FTSE 100 was 18.34 points lower, or 0.3%, at 7,201.13. The FTSE 250 was down 41.68 points, or 0.2%, at 19,085.60, while the AIM All-Share was up 0.1% at 909.30.The Cboe UK 100 was down 0.2% at 12,233.85, while the Cboe UK 250 was 0.1% higher at 17,000.18 and the Cboe UK Small Companies flat at 11,217.08.In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were down 0.2% and 0.1% respectively.European Commission President Jean-Claude Juncker does not expect US President Donald Trump to impose special tariffs on EU cars, as the German government on Monday said it hoped for a negotiated solution. The US Department of Commerce submitted to President Trump its assessment over whether importing cars and parts is affecting national security, the department said in a statement late Sunday.Trump could now decide to impose tariffs based on the report but Juncker remains confident.A Brussels spokesman said earlier that any retaliation from the European Commission would be "swift and appropriate". Talks are continuing between Europe and the US on trade issues and Germany, with its large car industry, hopes there can be a deal which avoids the tariffs.The Japanese Nikkei 225 index closed up 0.1%. In China, the Shanghai Composite closed up 0.1%, while the Hang Seng index in Hong Kong closed down 0.3%.On the London Stock Exchange, InterContinental Hotels Group was the best performer, up 1.8% after the hotel operator hiked its total annual dividend by 10%, despite reporting a fall in annual profit. For 2018, the FTSE 100 hotel operator posted pretax profit of USD485.0 million, down from USD656.0 million in 2017. Revenue increased 6.4% to USD4.34 billion from USD4.08 billion.The slump in pretax profit was due to an exceptional charge of USD104.0 million for acquisition & integration costs, litigation, reorganisation costs, and expenses related to the settlement of the pension scheme. IHG, which owns the Crowne Plaza, Holiday Inn and Staybridge Suites hotel chains and operates in almost 100 countries across the globe, reported global revenue per available room up 2.5%, boosted by a good performance in Greater China, up 6.9%. The Americas and Europe, Middle East, Asia & Africa regions saw revPAR up 1.9% and 2.7%, respectively. Furthermore, the company proposed a final dividend of 78.1 US cents, which alongside the company's interim dividend of 36.3c took the final payout up 10% year-on-year to 114.4 cents from 104.0 cents. At the other end of the large cap index, HSBC Holdings was the worst performer, down 2.7% after the Asia-focused lender reported strong growth in all of its global units, but missed profit consensus.Peer Standard Chartered, which reports its own annual results next Tuesday, was down 1.2%. 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.The bank's net interest income for 2018 came in at USD30.44 billion slightly below consensus. HSBC's net operating income of USD52.17 billion was below consensus of USD54.59 billion. In addition, Merrill Lynch downgraded HSBC to Neutral from Buy.BHP Group was down 2.0% after the Anglo-Australian miner said interim profit and revenue both rose and debt declined, while full year copper guidance has been given a boost.For the six months ended December, pretax profit grew 4.5% on the year to USD6.80 billion as revenue rose 1.0% to USD20.74 billion.However, underlying profit came in at USD3.73 billion, missing analyst consensus of USD4.37 billion. BHP is to hold its interim dividend per share at 55.0 US cents, unchanged on the year prior. Net debt fell 36% to USD9.89 billion from USD15.41 billion the year prior. Shares in BHP reached multi-year highs earlier this month, in the wake of the Vale-operated dam collapse in Brazil, which reduced supply of iron. In the FTSE 250, Greggs was up 8.5% after the food-on-the-go retailer reported a strong start to 2019, with sales boosted by its new vegan sausage roll, meaning it is likely to beat profit expectations for the year.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%. FirstGroup was up 4.1% after the transport operator said it has agreed terms for FTSE 250-listed peer Go-Ahead to purchase from FirstGroup a bus depot in Manchester, England.Go-Ahead has agreed to pay GBP11.2 million for The Queens' Road depot in Manchester, which also includes 163 buses. Go-Ahead shares were up 0.5%.Separately, Aberdeen-headquartered FirstGroup said that its 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.The pound was flat against the dollar, quoted at USD1.2930 against USD1.2933 at the London equities close Monday, ahead of UK jobs figures at 0930 GMT.The UK unemployment rate is expected to remain unchanged at a four-decade low of 4.0% in January."Today's UK data may attract some interest but the main focus of markets will probably continue to be on Brexit developments," noted analysts at Lloyds. Also in the economic events calendar Tuesday, there is eurozone current account data at 0900 GMT.Financial markets in the US reopen Tuesday after being closed on Monday for the Presidents' Day holiday.In the US earnings calendar, retailer Walmart is set to report fourth-quarter results on Tuesday before the market open in New York.
Related Shares:
HSBC HoldingsGreggsFirstgroupBHP Group