Banks hit big as Sainsbury’s tumbles

The big news of the morning is the final decision by UK and US regulators to fine HSBC, Royal Bank of Scotland, UBS (a Swiss bank), JP Morgan Chase and Citibank a total of £2 billion due to traders’ attempts to manipulate the forex. Already this morning, HSBC are down 1% to 631.2, with US banks like JP Morgan and Citibank expected to fall when the Dow Jones opens later today. The Dow, which closed at 17612 last night, is forecast to open slightly lower at 17600.5. In China, President Obama reached an agreement with President Xi to reduce greenhouse gas emissions by 2030.

In the UK, the FTSE closed at 6626.2 yesterday, opening 4 points lower at 6622.2 and still performing below last night’s six week high as we continue into the morning. The big hit to British banks, as well as poor figures by Sainsbury’s has resulted in this weakened position for the FTSE. There will be more movement in the UK markets expected later today, as the Bank of England look to announce that interest rates will remain at a record low until at least mid-2015. The unemployment rate is also expected to be 5.9%, the first time it has fallen below the significant 6% mark since 2008. If this is so, then the predicted 24.9k decrease in unemployment benefits claims should hold true.

As expected, Alibaba’s Singles’ Day sales exceeded expectations, reaching a record $9.3 billion in 24 hours. However, after the pre-Singles’ Day jump, Alibaba Group’s shares drop by nearly 4% after the announcement of their record breaking figures, which analysts have attributed to a combination of profit taking due to the peak prices pre-11.11, and potential uncertainties over Alibaba’s benefit distribution across members. Despite this drop, it is still expected that this fall is just a breather in the long term future of Alibaba’s stock prices. 

Finally, as mentioned above, Sainsbury’s stocks have fallen by 5% today to 252.85, as their interim announcement today disappointed shareholders. Underlying pre-tax profit fell by 6.3% to £375 million, whilst like-for-like sales were down 2.1%. This comes only 2 days after Sainsbury’s lost a court hearing against Tesco, where Sainsbury’s claimed that the latter’s Price Promise scheme was inaccurate and misleading. Sainsbury’s has pledged £150 million in order to provide the price cuts that would allow them to compete with the German upstarts Aldi and Lidl, who are increasingly eating into the bigger supermarkets’ profits.