Stock prices in London were mixed at midday Wednesday as the FTSE 100 was dragged down by HSBC and Glencore, ahead of minutes from the January Federal Open Market Committee meeting in the US.
The FTSE 100 index was down 66.87 points, 0.9%, at 7,652.34. The FTSE 250 was up 14.84 points, 0.1%, at 19,124.47, and the AIM All-Share was down 2.14 points, 0.3%, at 750.91.
The Cboe UK 100 was down 0.8% at 766.74, the Cboe UK 250 was up 0.2% at 16,552.91, and the Cboe Small Companies was down 0.2% at 14,465.60.
In European equities on Wednesday, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was up 0.2%.
“Markets remained skittish ahead of two major events on Wednesday that could have a significant influence over the direction of equities in the coming weeks. Tonight, we will get the minutes from the Federal Reserve‘s latest interest rate decision meeting as well as quarterly results from Nvidia. Both have the power to move the dial for investor sentiment,” said Danni Hewson, head of financial analysis at AJ Bell.
Nvidia fell 4.4% in New York on Tuesday ahead of fourth quarter earnings, which are due after the closing bell in New York.
Investors hold their breath ahead of pivotal Nvidia earnings
Minutes from the January Federal Open Market Committee meeting will be released. At that meeting, the Federal Reserve Chair Jerome Powell said that a cut in interest rates in March is not the ‘most likely case’. Since his comments, strong consumer and wholesale price inflation figures have backed this wait-and-see stance.
Stocks in New York were called lower, suggesting a nervous sentiment around the minutes. The Dow Jones Industrial Average and the S&P 500 index are both called down 0.2%, and the Nasdaq Composite down 0.4%.
Eyes have also been on the UK’s interest rate policy, amid comments from Andrew Bailey.
Bank of England governor Andrew Bailey at a Treasury Select Committee meeting on Tuesday said that the UK’s recession is ‘very weak’. Bailey said that compared to recessions dating back to the 1970s, the 0.5% cumulative reduction in gross domestic product in the third and fourth quarter was ‘the weakest by a long way’.
Bailey also signalled that inflation does not need to reach 2% before the bank starts cutting interest rates.
The pound was quoted at $1.2608 at midday on Wednesday in London, lower compared to $1.2649 at the equities close on Tuesday. The euro stood at $1.0796, down against $1.0818. Against the yen, the dollar was trading at JP¥150.04, higher compared to JP¥149.84.
In the FTSE 100, HSBC led losses, falling 7.3%.
HSBC announced further share buybacks as annual profit soared on the back of higher interest rates, though its fourth-quarter performance suffered due to an impairment.
The Asia-focused lender said pretax profit in 2023 surged 78% to $30.35 billion from $17.06 billion.
Total revenue rose 30% to $66.06 billion, from $50.62 billion.
HSBC said it has approved a fourth interim dividend of $0.31 per share, bringing the total dividend to $0.61 per share, almost double that of $0.32 in 2022. HSBC also said it will begin a share buyback of up to $2.0 billion, which it expects to complete by the announcement of its first quarter results.
Glencore results were also disappointing. Its shares fell 3.9%.
The Barr, Switzerland-based diversified mining group said net income in 2023 plunged 75% to $4.28 billion from $17.32 billion the year before, while adjusted earnings before interest, tax, depreciation and amortisation halved to $17.10 billion from $34.06 billion.
Revenue slipped 15% to $217.83 billion from $255.98 billion in 2022.
Glencore reduced the dividend to $0.13 per share after paying out $0.56 per share in 2022, as it reported a rise in debt to $4.92 billion from $75 million in 2022.
In the FTSE 250, C&C rose 2.2%.
The Dublin-based drinks maker and distributor said it will launch its €15 million share buyback programme next Friday. The buyback is part of the company’s plan to return up to €150 million to shareholders over the next three financial years, as announced in October.
On London’s AIM, Zinnwald Lithium surged 40%.
The lithium development company issued an updated independent mineral resource estimate for its 100% owned Zinnwald lithium project located in Saxony, eastern Germany.
It said the 2024 MRE update incorporates 26,911 metres of new diamond core drilling across 84 drill holes and a reinterpreted and updated geological model since the previous MRE which was released in September 2018.
Zinnwald highlighted a 445% increase in tonnes and a 243% increase in contained lithium in the Measured and Indicated category versus the previous 2018 MRE.
Brent oil was quoted at $81.74 a barrel at midday in London on Wednesday, down from $82.09 late Tuesday.
Gold was quoted at $2,027.98 an ounce, higher against $2,027.87.
Still to come on Wednesday’s economic calendar, there is eurozone consumer confidence data at 1500 GMT.
Further, there will also be eyes on speeches from some key central bank members. In the UK, Bank of England committee member Swati Dhingra will speak. In the US, Fed Governor Michelle Bowman will also do a talk.
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