HSBC underperforming in Europe, US as profits slip

HSBC's interim chief executive on Monday said the banking giant was underperforming in parts of Europe and the United States, as third-quarter profits slipped and the lender warned of further headwinds.

The Asia-focused behemoth has been trying to lower costs as it faces the double uncertainties caused by the grinding US-China trade war and Britain's impending departure from the European Union.

Noel Quinn, who took over as acting CEO after the shock ouster in August of John Flint, has overseen plans to axe some 4,000 jobs, primarily away from its more profitable businesses within the Greater China region.

"Parts of our business, especially Asia, held up well in a challenging environment in the third quarter," Quinn said in a statement attached to the bank's latest results.

"However, in some parts, performance was not acceptable, principally business activities within continental Europe, the non-ring-fenced bank in the UK, and the US," he added.

The results statement gave no concrete details of what further restructuring may be down the line and said investors would be updated before February 2020, when the full 2019 results are released.

But Quinn hinted at more pain ahead in the coming months.

Meanwhile, Asian markets rallied Monday after China and the US said they were close to agreeing a mini trade deal, but the pound was struggling on fresh Brexit uncertainty while EU leaders consider extending a deadline for Britain to leave the bloc.

Investors tracked a strong lead from Wall Street, where the S&P 500 flirted with another record, after the US Trade Representative's office said the top-level negotiators had held talks Friday and were "close to finalising" an agreement.

And the Chinese Commerce Ministry said both sides agreed to "properly address each other's core concerns", fuelling hopes the economic superpowers are on course to a resolution to their long-running and painful tariffs spat.

The two are aiming to get the pact ready to be signed by Donald Trump and Xi Jinping when they meet at next month's Apec meeting in Chile.

Hong Kong rallied 0.8 percent in afternoon trade and Shanghai ended up 0.9 percent. The techheavy Shenzhen composite index jumped more than one percent after Chinese state news reported Xi as saying China would boost investment in blockchain technology and speed up its development.

Bitcoin soared around 15 percent to nearly $10,000 -- its highest level for a month -- before ticking back slightly.

Tokyo and Seoul each ended 0.3 percent higher and Sydney was marginally up. Taipei, Bangkok Jakarta and Manila were also higher.

However, while the agreement would be a big positive for markets, analysts point out that it is still the first part of a wider deal that could take some time to complete.

And Ray Attrill at National Australia Bank said: "What's not yet clear yet is if both sides have agreed that even if the planned December 15 tariff increases won't go ahead if phase one is agreed, whether there will be any wind back of the higher tariffs imposed on September 1."

That issue, he said, was "something China was said to be demanding toward the end of last week but we doubt the US is ready to concede on".

Still, the mood on trading floors is positive and expectations that the Federal Reserve will cut interest rates again at its latest policy meeting this week were also providing support.

Sterling edged down with focus on Westminster, where MPs will vote later in the day on whether to grant Boris Johnson a December 12 general election, which he has called for to break the Brexit deadlock.

With lawmakers refusing to pass his divorce deal before Thursday's deadline, the prime minister wants a snap poll he hopes will give him a majority of MPs who will push it through parliament.

Also Monday, EU leaders will make a decision on whether to extend the deadline to the end of January and while expectations are for Britain to leave with a deal, Attrill added: "It's hard to see how this renewed level of uncertainty can be anything other than negative for Sterling given the size of recent gains."