Britain's main index fell on Tuesday, weighed down by disappointing results from blue-chip heavyweight HSBC and a stronger pound, while mid-cap baker Greggs surged to a record high after guiding to higher full-year profits. The FTSE 100 closed down 0.6 percent, its biggest fall in nearly two weeks, and the FTSE 250 was down 0.3 percent. HSBC was the biggest drag on the main bourse on its worst day in almost two years, as uncertainty around the China-US trade situation was reflected in the Asia-focused bank's disappointing profit growth.
Its shares slipped 4 percent, knocking more than 20 points off the FTSE 100 and dragging peer Standard Chartered down 2.1 percent, with the bank warning weaker economic outlooks for China and Britain would pose more challenges this year. Spreadex analyst Connor Campbell said HSBC finds itself "stuck in the middle of a Venn diagram covering China's slowing economy, the concerns surrounding global trade and Britain's Brexit mess."
Sterling rose on hopes that Prime Minister Theresa May's Brexit talks in Brussels this week would yield progress, while relatively strong labour market data helped sentiment towards the currency. Reckitt Benckiser fell 2.3 percent while other major dollar earners including AstraZeneca and Unilever also gave up a percent each. A new round of China-US trade negotiations kicks off this week and reports of progress in the talks, despite a lack of clear details, have raised hopes that the countries can reach a compromise by a March 1 deadline.
High street baker Greggs jumped 11.2 percent to an all-time high on the mid-cap index as sales rose in the first seven weeks of 2019 and it forecast higher full-year underlying pretax profit. But Indivior tumbled 11 percent after the US Supreme Court rejected the drugmaker's bid to block Dr. Reddy's Laboratories' copycat of its lucrative opioid addiction treatment Suboxone Film. Online trading platform Plus500, which has slumped since last week after a profit warning and a drafting error in its 2017 report, fell for a seventh straight session. The stock was down 10.7 percent.
Engineering firm Cobham advanced 4.9 percent after agreeing to settle a dispute with Boeing over its delayed KC-46 aerial refuelling programme.