Spreadex Market Update
FTSE falters ahead of services PMI; HSBC climbs nearly 4% as share buyback overshadows 29% profit-plunge
Flitting around 6650 the FTSE is beginning to look a bit weary, the index in need of a good news-injection from the Bank of England on Thursday; before it (potentially) gets that, however, it is going to have to endure another ominous piece of post-Brexit data. Markit’s early glimpse into the state of the UK services sector put the PMI reading at 47.4, the lowest figure (in something of a recurring theme this week) since the height of the financial crisis. The FTSE’s reaction will likely be determined by any movement around this estimate; the manufacturing reading on Monday came in far worse than forecast, while yesterday’s construction PMI just about beat expectations, so there is room for a slightly different number to arrive later in the morning.
Following yesterday’s surprising surge the pound is on a bit of a comedown this Wednesday. Yet it is still holding relatively strong against both the dollar and the euro; sterling is now trading at 1.33 against the former, and 1.186 against the latter, a remarkable performance given what is likely coming the currency’s way on Thursday.
Beyond the pre-services PMI jitters the main story this morning has been HSBC as Britain’s largest bank posted a spit-take inducing 29% plunge in first half profits to $9.7 billion. Yet what is more incredible is the fact that the stock has so far climbed 3.8% after the bell, HSBC drawing attention away from that ugly headline figure with the promise of a $2.5 billion share buyback thanks to the sale of its Brazilian business.
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