HSBC’S reality check weighs down Footsie

Market report Emma Newlands

London’s blue-chip index was dragged into the red by HSBC after the bank reported a whopping 62 per cent slide in annual profits.

The benchmark FTSE 100 ended the day down 25.03 points at 7,274.83. HSBC was the worst performer on the index, dropping 6.5 per cent or 46.6p to 665.7p, after posting a worse-thanexpected drop in pre-tax profits to $7.1 billion (£5.7bn), down sharply on the $18.9bn for 2015.

The bank blamed a string of one-off charges, such as the sale of its Brazilian operations, as well as hefty write-downs from a restructuring.

Jasper Lawler, a senior market analyst at London Capital Group, said: “These results were a dash of reality for investors in the banking sector who perhaps got a little ahead of themselves in hopes of financial deregulation, higher global growth and rising interest rates.”

However, “with lower write-downs and more time to benefit from higher global rates, we would expect next quarter to be a bit rosier”, he added.

In the UK markets, shares in Anglo American fell 9.5p to 1,350p as the mining giant reaped the benefits of recovering commodity prices and cost-cutting, swinging to an annual pre-tax profit of $2.6bn.

Shares in Plumb Center owner Wolseley fell 18p to 4,997p, despite inking a deal that will see it expand further into Switzerland.

The biggest risers on the FTSE 100 included Rolls-royce Holdings, up 24.5p to 732.5p, and Worldpay Group, up 4.5p to 272.3p. The biggest top-flight fallers included Hargreaves Lansdown, down 41p to 1,322p, and Royal Bank of Scotland Group, down 7.1p to 251.8p. The embattled outsourcing giant rose on revealing it had written off £50 million of historic contracts just two months after warning over profits. The firm dropped after reporting further challenges in its Abu Dhabi business, which are expected to contribute to a steeper drop in full-year revenue.