Adrian HollidayAsian equities saw mixed moves overnight. Some Chinese stocks were down as anxiety about the Chinese bond market trickled through. The Shanghai Composite was almost -0.84% lower at close to 7am London time; the Shenzhen index fell harder, down -1.52%.
However impressive end-of-week gains for US tech operators – think Amazon and Alphabet – help support Asian indices loaded with tech stocks; the Taiwanese Taiex was up +0.45% while the South Korean Kospi was +0.21% higher.
On the currency front the euro has moved beyond the $1.16 handle, up +0.06% to 1.1617 while sterling is +0.04% up against the dollar at $1.3139. The Spanish Catalan stand-off remains very much present though market reaction, so far, has been relatively muted despite chunky falls for Spanish banks CaixaBank and Sabadell; both are quitting their HQ’s from Barcelona. The euro is stronger against sterling, up +0.04% at 0.8841.
A rash of European business climate data emerges shortly including Economic Sentiment and Business Confidence plus German retail sales figures. Personal income numbers from the US emerge lunchtime. Looking further ahead, a President Trump announcement on who will head the US Fed looks likely by the end of the week – a currency mover. Also, it's likely the Bank of England will – after 10 years – lift UK interest rates on Thursday.
- UK FTSE 100 7,505.03 +0.25%
- Dow 23,434.19 +0.14%
- S&P 500 2,581.07 +0.81%
- Nasdaq 6,701.26 +2.20%
- Nikkei 225 22,011.67 +0.01%
- DAX 13,217.54 +0.64%
- CAC 40 5,494.13 +0.71%
- Gold 1,271.30 -0.04%
- Oil WTI 53.95 +0.09%
Profits surge for HSBC
The big corporate news this morning is a substantial profits boost for Hong Kong based HSBC. Pre-tax quarterly profits have landed at $4.6bn compared to less than $845m this time a year ago. That's close to a +450% increase.
"It's a spectacular set of results,” Kathleen Brooks from City Index told the Today programme, “but we do have to remember that this time last year, HSBC was in quite a lot of trouble so it's coming off quite a low base.”
It’s thought around 66% of HSBC’s profits hail from Asia; one of HSBC’s goals has been to push inland, beyond Hong Kong though there is plenty of home-grown banking competition in China itself. But the Asian middle classes is the future – HSBC anticipates Asian GDP will have lifted three-fold by 2050.
easyJet moves seizes the day with the remains of Air Berlin: ShutterstockeasyJet snaps up Air Berlin remains
This morning easyJet confirmed it has signed an agreement to buy a chunk of Air Berlin’s Tegel Airport operations for €40m including leases for up to 25 A320 aircraft. There is also a recruitment move to hang onto up to 1,000 Air Berlin pilots and cabin crew.
The move, says easyJet, allows it to “operate the leading short haul network at Tegel connecting passengers to and from destinations across Germany and the rest of Europe. This is in addition to easyJet's existing base at Berlin Schönefeld and would mean that easyJet would be the leading airline in Berlin.”
Breaking news: Novartis has made a $3.9bn bid for France's Advanced Accelerator Applications which focuses on anti-cancer tech treatments. Barclays plays down Bank of England rate rises for 2018: "While the BoE is likely to communicate the start of a mini hiking cycle, we do not expect further rate hikes in 2018, and expect data to prove the BoE wrong."