Banking profits fail to boost FTSE
A 10% rise in profits for the UK’s biggest bank today failed to stave off a downbeat beginning to the week for the FTSE 100 Index.
HSBC’s 2007 profits of £12.2 billion helped the giant move more than 3% ahead to the top of the Footsie risers’ board but its progress was offset by losses elsewhere in the sector.
The London market eventually closed 65.7 points lower at 5818.6 – a fall of more than 1% – as US markets continued the declines seen at the end of last week on disappointing manufacturing figures.
HSBC rose 24p to 790p after strong growth in Asia and emerging markets more than offset increased bad debt write-downs in the US, where the economy is continuing to deliver cause for concern.
Its diverse spread protected it from the damage inflicted on several other banking stocks because of the fears over the housing market and faltering economic confidence in the US.
Halifax Bank of Scotland was the leading faller – down 45.5p to 558p, with Royal Bank of Scotland off 15.75p to 369.25p.
Barclays was down 15.25p to 462p despite its move into the fast-growing Russian retail banking market with a £373 million deal for Expobank, while Alliance & Leicester slipped 38p to 525.5p.
FT publisher Pearson also posted full-year results today but shares fell almost 3% or 17.5p to 648.5p as investors disregarded chief executive Marjorie Scardino’s forecasts for “another good year” in 2008.
Despite her upbeat comments, analysts cited concerns about the impact of any economic slowdown on advertising revenues.
Among the firms in positive territory, food and catering giant Compass was one of the leading Footsie risers after being upgraded by brokers at Credit Suisse on hopes of better than expected US margins. This lifted Compass 5.75p to 332.25p.
Rolls-Royce also climbed the risers’ table after news of a 2.6 billion US dollar (£1.31bn) engines deal with Sir Richard Branson’s Virgin Atlantic. Shares rose 5.75p to 440.25p.
Elsewhere, computer games firm Game rose more than 2% in the FTSE 250 Index after it raised its sales guidance for this year and said full-year profits in April would be at least £1 million better than previously thought. Shares lifted 4.75p to 191p.
And Helphire, which provides car rentals for motorists involved in accidents, gained nearly 15% after directors bought shares in the wake of last Friday’s post-results sell-off. The stock rose 25.25p to 197.25p.
The woes of the banking sector meant Bradford & Bingley topped the second-tier fallers board. Shares were off 9% or 20.5p to 204.5p as recent speculation over possible takeover interest from Lloyds TSB also faded.
The Footsie’s four biggest risers were HSBC up 24p to 790p, Compass up 5.75p to 332.25p, Sage up 2.75p to 200.25p and Lonmin which closed 45p better off at 3352p.
The four biggest fallers were HBOS down 45.5p to 558p, Alliance & Leicester off 38p to 525.5p, Friends Provident down 6.5p to 127p and Aviva off 27p to 584.5p.
