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HSBC figures halt FTSE's move higher

The start of a four-month Greek crisis-free holiday saw the FTSE open at record levels, last seen in 1999, before disappointing HSBC figures halted momentum. 

A HSBC branch
Source: Bloomberg

The economic data due for release today is a little thin on the ground; however, depending on how the picture unfolds surrounding Syriza’s efforts to convince the Greek electorate that it must continue down the path of austerity, the day could still be interesting.

The tabled agreement between the Troika and Syriza this weekend offers a four-month window of opportunity for Greece to get its house in order, and considering it has not managed that over the last number of years cynics would suggest this is an issue we are almost certain to revisit later in the year.

Tomorrow we will hear from Mario Draghi, Mark Carney and Janet Yellen, and it is no surprise that traders are already looking past today’s issues to the looming impetus that these financial leaders will give the markets.

Bovis Homes has posted record figures as it has benefited from government legislative changes and resilient housing markets driving its pre-tax profits up by 69%. Because of its slightly beneficial exposure to the lower-tier property ladder, rivals like Barratt Developments – reporting earnings later in the week – might find these impressive figures difficult to replicate.

Once again Associated British Foods has Primark to thank for propping up its results, as the 16% jump in sales at the ‘Fashion Chain’ has partially made up for weak figures from its exposure to the sugar market, which continues to leave a bitter taste in the mouth.

Because of the dual quote in Hong Kong, HSBC’s figures were posted after the open and – adding to the negative sentiment hanging over the company following the revelations surrounding its Swiss branch – the company has missed its targets. Expectations of $21billion in pre-tax profit have been missed, and the disappointing $18.68 billion figure has contributed to its shares dropping by almost 6% in the first hour of trading.

Shares in Quindell jumped by over 25% as the company confirmed it was in talks with Slater & Gordon over the sale of its professional service division. Now that it is a penny stock these moves barely make a dent in the falls seen last year.   

After another flourish at the end of the previous trading week US futures are pointing towards a softer start, with only a few corporate stragglers yet to post their quarterly figures. The economic landscape, however, has plenty to offer and the two-day semi-annual monetary policy report – coupled with two testimonies from Federal Reserve chair Janet Yellen – will offer further indication regarding the Fed’s confidence when it embarks on a course of interest rate rises.

Ahead of the open we expect the Dow Jones to start 34 points lower.

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