Tuesday saw a little increase in the blue-chip FTSE 100 index in London, helped by a surge in HSBC shares as the lender’s quarterly profit tripled. However, overall gains were constrained by weakness in the energy sector.
By 0755 GMT, the FTSE 100, which is geared toward the global market, had gained 0.2%, while the mid-caps index (.FTMC) had gained 0.6%.
After exceeding forecasts for its first quarter profit and paying its first quarterly dividend since 2019, HSBC Holdings (HSBA.L) rose 4.7% to the top of the FTSE 100. This was due to the global rise in interest rates.
Sectoral gains were led by the broad banks index (.FTNMX301010), which increased 2.7%.
The findings follow an agreement by big American bank JPMorgan Chase (JPM.N) to purchase ailing regional lender First Republic Bank’s (FRC.N) assets, which helped allay some concerns about a coming banking crisis.
“The HSBC results are encouraging. According to Giles Coghlan, chief market analyst at HYCM, “We don’t have the same issue in the UK that perhaps we do in the U.S. with investors moving money to money market funds trying to benefit from that short-term increase in bond yields.”
“Markets are relieved that JPMorgan and First Republic Bank have resolved their conflict. As a result, there is often a better mood and less mention of fears of banking contagion.
After reducing its share buyback program, BP (BP.L) lagged behind, falling 5.1%. However, strong oil and gas trading helped the oil major turn a $5 billion profit in the first quarter of 2023.
Oil and gas industry losses were 2.3% (.FTNMX601010).
Since most markets were closed on Monday due to Labor Day, investors have turned their attention to a week of significant rate announcements, including one from the U.S. Federal Reserve on Wednesday, to determine whether interest rates would continue to rise.