LONDON: London’s FTSE 100 reversed early gains to end Tuesday lower as a slump in energy firms outweighed strong earnings from Europe’s biggest lender, HSBC, in the first quarter.
HSBC Holdings Plc advanced 3.5%, touching a near two-month high as it also announced its first quarterly dividend since 2019.
“HSBC has seen profits soar, and investors should be reasonably happy with the restored quarterly dividend and $2 billion buyback that looks likely to be completed over the next quarter,” said Matt Britzman, equity analyst at Hargreaves Lansdown The broader banks index rose 1.1% and was the biggest boost to the FTSE 100, but the blue-chip index still closed 1.2% lower, logging its worst performance in over a month, weighed down by the oil and gas sector that dropped 5.9%.
Oil prices slumped 4% on fears that the US, the world’s largest economy, could likely default on its payment obligations and weak data from top importer China.
BP slumped 8.6% and clocked its worst day in over three years after paring back its share buyback programme.
The FTSE 250 mid-cap index shed 0.6%.
Both the FTSE indexes logged gains in April with defensive sectors like healthcare and utilities among gainers.
Investors now await interest rate decisions by major central banks that would help them gauge the outlook for monetary tightening henceforth and the consequent impact on corporate earnings.
Among other movers, online education firm Pearson Plc tanked 15.0%, clocking its worst daily loss in over six years after US rival Chegg Inc issued a lower forecast, warning on tough ChatGPT competition.
Restaurant Group jumped 14.3% after the small-cap name said it expects profit margins to improve in the medium-term.
Meanwhile, factory output and new orders contracted at the start of the second quarter of 2023, as per an industry survey.
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