HSBC stock rises to defy gloom in the financial sector
THE index of leading shares slid 1.1% yesterday, dragged by banks and oil stocks as investors feared a US recession was nigh, but global bank HSBC bucked the trend on its results and a higher dividend.
HSBC led the FTSE-100 gainers, rising 3.1%, or 24p, to 790p after saying its profit rose 10% last year, as strong gains in Asia helped it absorb a $17.2bn hit for bad debts due to US housing market problems. Its full-year dividend rose by 11%.
The FTSE-100 ended down 65.7 points at 5818.6, sealing a four-day losing run as conti- nental European shares also fell sharply.
The UK benchmark index lost nearly 9% in the first two months of the year as creditrelated writedowns by financial firms and a slew of weak economic data stoked US recession fears.
Banks were stand-out losers, with HBOS down 45.5p to 558p, and Alliance & Leicester off 38p at 525.5p.
Royal Bank of Scotland dropped 15.25p to 369.25p, and Barclays fell 15.25p to 462p.
Among other financials, hedge fund group Man Group lost 23p to close at 532p, while insurers Aviva and Standard Life shed about 4%.
The latter was down 27p at 584.5p, while Standard Life fell 8.75p at 210.25p.
Oil and gas producers were the top losing sector, hit by global economic growth concerns and shaving more than 17 points off the index.
BP shares fell 5.5p to 540.5p, while Royal Dutch Shell was down 40p at 1768p, and gas producer BG Group fell 11p to 1181p.
Mining stocks reversed ear- lier losses to buck the trend as gold set a record high for the fourth day in a row and copper prices rose.
Shares in Pearson dropped 2.6%, or 17.5p, to 648.5p after it trimmed its revenue growth outlook in some areas despite announcing above-forecast profits.
GlaxoSmithKline shares added 4p to close at 1106p after the drugmaker said its experimental platelet-boosting drug Promacta has been granted priority review by US health regulators, boosting prospects for its early launch. – Reuters
WALL Street closed narrowly mixed yesterday, as investors wrestled with record-high commodities prices and data that pointed to a continually weakening economy.
Investors have been trying to determine whether recent pessimism about the economy has been well-founded or overwrought. The Institute for Supply Management’s index of US manufacturing activity came in yesterday at 48.3 – a little stronger than the 48.1 the mar- ket expected, but still, its lowest level in nearly five years.
The Commerce Department reported that construction spending in January fell by 1.7%, the steepest amount in 14 years.
The Dow Jones Industrial Average slipped 0.06%. The Standard & Poor’s 500 was up 0.05%, while the Nasdaq Composite fell 0.57%.
“The two economic numbers that came out today were still rather on the negative side and they point to furtherweakness in economic activity,” said a New York-based economist. – AP