Wednesday, February 21, 2024 8:46am
HSBC and Glencore weighed on the FTSE 100 index after markets were disappointed with the latest results, sending the index into the red on Wednesday morning.
The FTSE 100 index opened 0.60% lower at 7,672.76, while the FTSE 250 index, which is more closely linked to the health of the domestic economy, rose slightly to 19,114.34.
HSBC was the last bank to release results, following Barclays yesterday and NatWest last week, but the market was unimpressed.
The company’s shares fell more than 6% after the company announced it had recorded a $3 billion writedown on its holdings in Bank of Communications Bank of China.
Traders were also concerned about an 80% drop in HSBC’s fourth-quarter profit and the announcement of a new $2 billion share buyback.
“Confirming much of the confusion, results appear to have been slightly worse than expected, with higher operating costs more than offsetting slightly improved impairments,” said Matt Blitzman, equity analyst at Hargreaves Lansdown. Stated.
Glencore’s share price fell by 4.3 after the mining giant reported lower profits and a cut in shareholder returns.
The group’s 2023 earnings before interest, tax, depreciation and amortization (EBITDA) was $17.1 billion, about half of what it was a year ago, according to the company’s full-year figures.
In line with its policy of returning a percentage of profits to investors, the company cut its base dividend to $1.6 billion (£1.3 billion), or 10 pence per share. However, the group did not announce any additional cash returns through share buybacks, as it had previously done.
BAE Systems also fell slightly on Wednesday despite reporting strong results.
The UK’s major defense contractors’ order book reached £69.8bn in the 12 months to 31 December, led by £37.7bn of orders. This follows a number of significant contract wins, including the AUKUS submarine program and the Dreadnought nuclear deterrent submarine.
However, the company’s shares were trading 1.9% lower in early trading.