FTSE lower as HSBC shares slide on below-forecast profits

HSBC shares fell (Matt Crossick/PA)

The FTSE 100 dropped on Wednesday after a weak reaction to updates from a number of London-listed heavyweight companies including HSBC, Glencore and BAE Systems.

HSBC was among the biggest fallers after its profits missed market expectations after a hit in recent months because of its ties to China’s struggling property market.

Its pre-tax profit plunged by 4.1 billion US dollars (£3.3 billion) to one billion US dollars (£800 million) in the final three months of the year, although its annual profits still saw a significant jump.

Shares in the company dropped by 54p, or 8.4%, to 589.8p.

It came after Bank of England rate-setter Swati Dhingra continued her dovish tones, suggesting waiting to cut rates would have an impact on living standards.

The FTSE 100 fell 56.7 points, or 0.73%, to end the day at 7,662.51.

In mainland Europe, stocks were broadly more positive, as the German Dax index was up 0.29% at the close and the Cac 40 closed up 0.22%.

Across the Atlantic, there was greater caution, particularly ahead of key earnings figures from tech giant Nvidia.

Axel Rudolph, senior market analyst at IG, said: “Stock indices were little changed amid speeches by several Fed, ECB (European Central Bank) and MPC (Monetary Policy Committee) members as investors remained cautious ahead of the publication of the FOMC (Federal Open Market Committee) minutes and after the bell Nvidia earnings.

“Meanwhile the UK public sector posted its largest surplus on record and CBI factory orders came in above expectations, both of which indicate that the current recession may turn out to be a shallow one.”

In currency, the pound was down 0.07% at 1.261 US dollars and was 0.06% lower at 1.166 euro at market close in London.

Elsewhere in company news, defence giant BAE Systems finished in the red despite another rise in sales amid geopolitical tensions.

BAE Systems saw its order backlog soar to a record of nearly £70 billion as countries around the world continued to try to build up their military capacity.

The company saw shares dip by 11.5p to 1,241.5p at the close

Mining firm Glencore was another faller after it cut its shareholder dividend and posted lower profitability.

Shares were down 4.35p at 386.05p as earnings for 2023 were cut in half to 17.1 billion US dollars (£13.5 billion) after oil prices softened.

BT finished higher after the telecoms business said it would receive £275 million for the sale of the BT Tower to a US hotel firm.

MCR Hotels will convert the 177-metre tall communications tower into an upmarket hotel and open it to the public following the deal. BT shares were up 1.75p at 108.6p.

The price of oil swung back higher.

A barrel of Brent crude oil was up by 0.45% to 82.71 US dollars as markets were closing in London.

The biggest risers on the FTSE 100 were Intercontinental Hotels Group, up 196p to 8,530p, IAG, up 3.25p to 150.95p, BT, up 1.75p to 108.6p, Beazley, up 8.5p to 582p, and B&M European, up 6.8p to 524.2p.

The biggest fallers on the FTSE 100 were HSBC, down 54p to 589.8p, Centrica, down 4.1p to 129.3p, Entain, down 24.2p to 898.8p, Flutter Entertainment, down 425p to 16,165p, and Ocado, down 12.8p to 519p.