- HSBC beats forecasts with Q3 results
- Weir, Ryanair issue profit warnings
- Economic data, ECB rate-cut speculation drive markets
techMARK 2,661.91 +0.16%
FTSE 100 6,767.20 +0.48%
FTSE 250 15,519.66 +0.41%
UK markets were performing well on Monday morning, owing to speculation over a possible Eurozone rate cut, better-than-expected economic data and strong quarterly results from HSBC.
Shares in HSBC, the FTSE 100's largest stock by market capitalisation, rose strongly in London after delivering a 10% jump in underlying profits in the third quarter.
Meanwhile, activity in China's services sector in October expanded at its fastest pace in the last year, reinforcing confidence that the world's largest economy is on a stable growth path. The non-manufacturing purchasing managers' index (PMI) rose from 55.4 to 56.3 in last month.
Closer to home, the UK construction PMI rose to 59.4 in October, up from 58.9 in September and ahead of the 58.8 forecast. The latest reading signalled that overall output growth accelerated at its steepest rate of change since September 2007 and surpassed August's recent peak.
The UK outlook also brightened after the Confederation of British Industry (CBI) raised its economic growth forecast in a quarterly report. The business lobby group now predicts the economy will expand 1.4% this year and 2.4% in 2014, compared to the 1.2% and 2.3% projected in August.
Market sentiment was also lifted this morning by chatter around the possibility of an European Central Bank rate cut either this week or at its next meeting in December.
Matt Basi, Head of UK Sales Trading at CMC Markets, said that these rate-cut rumours have "seen traders putting risk back into the market this morning, reclaiming some of the ground we lost to Fed tapering speculation last week".
HSBC gains after Q3 beat
HSBC jumped after saying that underlying profit before tax totalled $5.06bn in the three months to September 30th, up 10% from $4.6bn the year before and ahead of forecasts. Underlying revenues were broadly unchanged at $15.6bn but still better than analysts' estimates.
Mining stocks were also on the rise, buoyed by the upbeat outlook for top metals consumer China. Fresnillo, Antofagasta, Rio Tinto, Anglo American and BHP Billiton were among the best performers.
Heading the other way was Weir Group after the engineering firm cut its full-year profit outlook due to the impact of the recent weakness in the US and Australian dollar. Numis reacted by downgrading its rating on the stock to 'add' this morning.
Ryanair also surprised the market with a profit warning today, saying that full-year profits will fall for the first time in five years as airfares drop in Europe due to fierce competition. Sector rivals easyJet and IAG also fell sharply following the announcement.
Utility peers SSE and Centrica were trading lower after analysts at Investec downgraded their ratings on both stocks to 'reduce' due to increased political risk.
FTSE 100 - Risers
Fresnillo (FRES) 988.00p +3.19%
Rio Tinto (RIO) 3,267.50p +2.62%
Antofagasta (ANTO) 858.00p +2.51%
HSBC Holdings (HSBA) 704.20p +2.46%
Croda International (CRDA) 2,494.00p +2.09%
Aberdeen Asset Management (ADN) 448.10p +1.75%
Anglo American (AAL) 1,483.00p +1.58%
Rexam (REX) 525.00p +1.45%
Mondi (MNDI) 1,123.00p +1.35%
Smiths Group (SMIN) 1,441.00p +1.26%
FTSE 100 - Fallers
Weir Group (WEIR) 2,096.00p -7.09%
easyJet (EZJ) 1,244.00p -4.01%
Meggitt (MGGT) 494.80p -2.79%
International Consolidated Airlines Group SA (CDI) (IAG) 347.10p -1.92%
G4S (GFS) 250.10p -1.84%
Royal Bank of Scotland Group (RBS) 334.10p -1.74%
ARM Holdings (ARM) 966.50p -0.97%
Aggreko (AGK) 1,569.00p -0.95%
United Utilities Group (UU.) 696.00p -0.85%
TUI Travel (TT.) 376.90p -0.82%
FTSE 250 - Risers
Kenmare Resources (KMR) 21.63p +3.99%
Evraz (EVR) 121.20p +3.86%
International Personal Finance (IPF) 599.00p +2.74%
Chemring Group (CHG) 219.70p +2.66%
Wetherspoon (J.D.) (JDW) 731.00p +2.60%
Essar Energy (ESSR) 120.00p +2.56%
African Barrick Gold (ABG) 198.00p +2.48%
Ted Baker (TED) 1,730.00p +2.37%
Henderson Group (HGG) 221.90p +2.21%
UDG Healthcare Public Limited Company (UDG) 320.50p +2.20%
FTSE 250 - Fallers
Imagination Technologies Group (IMG) 262.50p -2.78%
Thomas Cook Group (TCG) 140.60p -2.70%
Diploma (DPLM) 681.00p -1.30%
Enterprise Inns (ETI) 145.50p -1.22%
Ocado Group (OCDO) 433.30p -1.21%
RPS Group (RPS) 293.70p -1.18%
Perform Group (PER) 553.50p -1.16%
Smith (DS) (SMDS) 297.80p -1.13%
ITE Group (ITE) 312.00p -1.08%
Investec (INVP) 434.20p -0.98%