- HSBC misses profits forecasts by a wide margin
- Credit Suisse and Panmure Gordon lift price targets for ABF
- Carney dismissed banks' capital requirement concerns
- Bunzl jumps on strong results
techMARK 2,897.49 +0.11%
FTSE 100 6,818.18 -0.29%
FTSE 250 16,435.89 -0.15%
Stocks were holding slightly lower come midday, following losses overnight in Asia, particularly in China. Disappointing data out on property prices from China overnight pushed the Shanghai Composite firmly into the red on Monday morning.
The selling pressure was also a result of the weak close to trading seen on Wall Street last Friday. That came as at least two Fed officials indicated that for now 'tapering' was on track to continue.
The FTSE 100 was trading 20 points lower at 6,818.
Speaking from Australia, Bank of England Governor Mark Carney indicated in an interview that he gave limited concern to banks' fears over proposals for new capital requirements and said the new rules were necessary to protect against another crisis.
Speaking to the Sydney Morning Herald, he said: "Banks went into the financial crisis carrying de minimis levels of capital for example, less than two percentage points relative to their risk-weighted assets, let alone their actual assets. They carried basically no liquidity protection and they were reliant on the state to insure.
"The consequence was that we had a crisis where even countries that did the right thing in advance, such as my native Canada and here in Australia, had to take extraordinary measures to support the banks."
In line with previous remarks on the subject of monetary policy, Carney reiterated that "we will not take risks with the recovery".
Chinese data disappoints as growth slows
For the first time in 14 months, average new home prices in the country's 70 major cities showed signs of easing, up 9.6% compared to a year earlier, compared to a 9.9% year-on-year climb registered the previous month.
"There is a very real fear that the People's Bank of China will be forced to tighten lending related to property in a bid to slow down the rise in property prices," Alpari UK Market Analyst Craig Erlam explained.
Friday´s Eurozone CPI data still in focus
The Eurozone´s Consumer Price Index for January was revised slightly higher, to reveal a gain of 0.8% year-on-year (consensus: 0.7%). At an 0.8% annualised gain the increase in the 'core' rate was as expected by consensus.
It comes as pressure has been building on the European Central Bank to undertake further stimulus measures to forestall the potential risks from greater than expected disinflation.
On Friday Eurostat is due to release its preliminary reading for February´s CPI, which Credit Suisse expects to reveal a drop to 0.6%.
The German Ifo business climate index surprised to the upside this morning, having gained to 111.3 in February. However, the rise was due exclusively to an improvement in the current conditions sub-index.
HSBC profits miss by a wide margin
Pre-tax profits at HSBC rose nine per cent in 2013 to $22.5bn (consensus: $24.6bn) as the company continued to slash costs and jobs in its drive to reduce operating expenses. As a result, Cannacord Genuity lowered its target price on the lender´s shares
to 750p from 825p.
Bunzl was at the top of the leaderboard throughout the morning after revealing its 2013 operating profit had jumped 18% to £414m, boosted by acquisitions, but warned that adverse exchange rate
movements could hit future earnings if they remained at current levels. Pre-tax profits rose to £372.2m, an increase of 18% on the back of increased revenues of £6.1bn against £5.3bn in 2012. The FTSE 100-listed distribution and outsourcing giant also announced it had acquired businesses in Germany and the Czech Republic.
Vodafone was moving higher by 5.84% as investors were issued with new Vodafone shares following the Verizon deal.
Also in the red was RSA Insurance, which issued a statement acknowledging recent press speculation regarding a potential rights issue and stated it was "considering" several options. The group said: "RSA is considering measures to strengthen its balance sheet, including raising capital by way of a rights issue, however no final decision has been made by the company at this time. Further details will be given when appropriate." The Sunday Times reported that the fund-raising exercise might aim to bring in about £800m in fresh capital, more than some other observers had been estimating.
Associated British Foods also dropped early on. The group said it expects first half adjusted operating profit to be in line with 2013 as a slump in the Sugar business was offset by a strong performance from its Primark stores. The company's revenue and profit from Sugar will be substantially lower than last year, as prices declined. The world sugar price has also fallen to an "unsustainably low level", putting further pressure on industry revenues and margins. However, analysts at both Panmure Gordon and Credit Suisse on Monday hiked their price targets for the company´s shares.
Housebuilder Bovis Homes moved higher on the second tier after it posted a 48% increase in pre-tax profit and said it was confident of achieving strong 2014 results.
FTSE 100 - Risers
Bunzl (BNZL) 1,559.00p +5.12%
William Hill (WMH) 363.80p +1.79%
Hargreaves Lansdown (HL.) 1,337.00p +1.75%
ARM Holdings (ARM) 984.50p +1.49%
Prudential (PRU) 1,362.00p +1.34%
Severn Trent (SVT) 1,832.00p +1.27%
Melrose Industries (MRO) 321.20p +1.23%
Fresnillo (FRES) 1,002.00p +1.06%
Sports Direct International (SPD) 785.00p +0.83%
Marks & Spencer Group (MKS) 505.00p +0.80%
FTSE 100 - Fallers
Vodafone Group (VOD) 251.60p -33.54%
HSBC Holdings (HSBA) 632.00p -3.39%
RSA Insurance Group (RSA) 98.55p -2.62%
Associated British Foods (ABF) 2,919.00p -2.47%
Standard Chartered (STAN) 1,295.50p -1.56%
Rio Tinto (RIO) 3,546.00p -1.53%
Anglo American (AAL) 1,537.50p -1.47%
G4S (GFS) 233.70p -1.27%
Pearson (PSON) 1,099.00p -1.26%
Antofagasta (ANTO) 943.50p -1.20%
FTSE 250 - Risers
Dixons Retail (DXNS) 50.75p +7.61%
Centamin (DI) (CEY) 57.00p +6.34%
Playtech (PTEC) 845.50p +2.98%
Ferrexpo (FXPO) 170.00p +2.97%
UDG Healthcare Public Limited Company (UDG) 359.80p +2.80%
International Personal Finance (IPF) 496.50p +2.16%
Serco Group (SRP) 412.20p +1.83%
Bwin.party Digital Entertainment (BPTY) 126.20p +1.69%
Synthomer (SYNT) 278.40p +1.61%
Cairn Energy (CNE) 195.40p +1.45%
FTSE 250 - Fallers
Rightmove (RMV) 2,654.00p -3.63%
Evraz (EVR) 79.40p -3.46%
Foxtons Group (FOXT) 365.40p -2.97%
Balfour Beatty (BBY) 306.70p -2.57%
Hellermanntyton Group (HTY) 310.10p -2.42%
CSR (CSR) 671.50p -2.40%
Xaar (XAR) 1,104.00p -2.21%
Alent (ALNT) 315.40p -2.14%
Fidelity China Special Situations (FCSS) 104.70p -1.97%
Bodycote (BOY) 685.00p -1.93%
FTSE TechMARK - Risers
Ark Therapeutics Group (AKT) 0.52p +6.12%
Innovation Group (TIG) 34.50p +1.47%
XP Power Ltd. (DI) (XPP) 1,767.00p +1.26%
Kofax Limited (DI) (KFX) 486.00p +1.25%
Consort Medical (CSRT) 1,066.00p +0.85%
Promethean World (PRW) 38.17p +0.77%
FTSE TechMARK - Fallers
Sarossa Capital (SRC) 1.47p -9.54%
RM (RM.) 145.10p -2.70%
Dialight (DIA) 747.00p -2.35%
Puricore (PURI) 42.00p -2.33%
Optos (OPTS) 201.00p -1.83%
Torotrak (TRK) 21.00p -1.75%
Skyepharma (SKP) 191.00p -1.55%
Vectura Group (VEC) 162.50p -1.52%
Anite (AIE) 91.50p -1.08%
Wolfson Microelectronics (WLF) 128.75p -0.96%