Market report

HSBC shares up on break-up call | McColl’s suspension


10pm: Wall St higher

US markets were up for a second day following a brutal April and ahead of the US Federal Reserve’s monetary policy commentary on Wednesday.

The S&P 500 closed 0.48% up, the Dow Jones Industrial Average added 0.2% while the Nasdaq Composite edged 0.22% higher.

5pm: BP profits fuel shares uplift

There was only one real winner on the FTSE 100. BP shares have shot up following the rather insanely impressive profits the company announced this morning, said Danni Hewson, AJ Bell financial analyst.

“It doesn’t matter that its balance sheet has been battered after it had to pull out of Russia and sever ties with Rosneft – those profits have popped the company right back into the political frying pan with renewed calls for it to be hit with a windfall tax.

“So far the government has been adamant that investment pledges rather than penalties is the way to go, but the local elections are looming and with Shell expected to make an even bigger splash there’s little doubt that a week is a long time in politics.”

Brent oil was quoted at $106.12 a barrel at the London equities close, down from $110.30 late Friday. However, the price of the North Sea benchmark remains 36% higher in the year-to-date.

After spending most of the day under water the FTSE 100 closed 26.78 points to the good at 7,561.33.

Elsewhere, Card Factory said profit before tax came in at £11.1m against a loss of £16.4m the year before, which the company said was ahead of expectations. Shares were up 10% at one stage and closed 5,8% higher.

10am: Manufacturing rises

UK manufacturing sector activity edged higher on increased intakes of new business against a backdrop of rising price inflationary pressures, S&P Global said.

The UK S&P Global-CIPS manufacturing purchasing managers’ index was 55.8 points in April, up slightly from the preliminary estimate of 55.3 and the score of 55.2 registered in March.

7.30am: McColl’s requests suspension

McColl’s Retail Group has requested suspension of its shares to provide more time to conclude refinancing talks and publish its annual results.

It wants a suspension of trading from 1 June.

7.15am: BP profits rise

BP’s profit for the first quarter came in at $6.2 billion against $2.6bn for the same period last year and $4.1bn for the previous quarter.

A $24bn writedown of its 19.75% stake in Russian oil giant Rosneft and two other joint ventures pushed BP into a headline loss of $20.4 billion in the quarter.

The underlying replacement cost profit, the company’s preferred definition of net earnings, was driven by exceptional oil and gas trading and a stronger refining result. It exceeded analysts’ expectations of $4.49bn.

It is likely to ramp up calls for a windfall tax on energy companies to help ease the cost of living crisis facing households and businesses.

Labour’s shadow chancellor tweets: “The case for a one-off windfall tax on oil & gas producer profits cannot be ignored.”

Full story here

6.45am: HSBC shares rise on break-up call

Shares in HSBC Holdings gained 1.85% in Hong Kong after its largest shareholder, Chinese insurance giant Ping An, urged a break-up of the London-headquartered bank in a bid to improve returns.

Sources familiar with the situation said on Friday that Ping An had called on HSBC to look at options including spinning off the Asian business, where it earns two-thirds of its pre-tax profits.

Global markets

Brent crude oil spiked 44 cents, or 0.4%, to finish at $107.58 a barrel as the European Union prepares to impose an embargo on Russian oil exports.

The embargo is also likely to be phased, allowing EU members time to reduce their dependency on Russian energy. Germany’s economy ministry reported that its Russian oil imports have already been scaled back substantially.

The sanctions package is due to be distributed among bloc members on Wednesday. Hungary and Slovakia, two members highly dependent on oil, would likely be given an exemption under the embargo. That would help ease some supply pressures in Europe overall, but the net impact would likely push oil prices higher.

The Dow Jones Industrial Average was 0.26% higher, the S&P 500 improved 0.57%, while the tech-heavy Nasdaq Composite closed up 1.63% amid expectations that the US Federal Reserve will use its meeting on Wednesday to outline further interest rate increases to combat the record inflation.

The Bank of England is expected to raise the rate to 1% on Thursday, the highest level since 2009, 

Prices in the UK are 7% higher than a year ago, the steepest acceleration since 1992, while in the US inflation is running at 8.5%, a level last seen in the early 1980s.

Earlier this morning the Reserve Bank of Australia made its first interest hike in over 10 years, from 0.1% to 0.35%.

The China purchasing managers’ index (PMI) data showed that economic activity in April fell back by more than expected.

The non-manufacturing PMI index fell to its lowest since February 2020, when the country was locked down in the first reaction to the Covid-19 outbreak, with the manufacturing PMI also dropping.

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