Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

HSBC share price moves higher in February ahead of full-year results

The lender has seen its share price claw back losses sustained in January ahead of its full-year results next week, with analysts at Credit Suisse backing the stock as its top pick among UK banks in 2020.

HSBC has seen its share price climb more than 6% since early February, regaining some of the losses it sustained in January.

The recent rally has been supported by analysts from Credit Suisse opting to back the stock as its top pick among UK banks in 2020, with its full-year results around the corner (18 February).

The Swiss bank upgraded its rating for the stock to ‘outperform’ in February, stating that the lender was at a ‘pivotal stage, with all the pieces in place to make Strategy 2020 a success’.

‘Our detailed review of HSBC's cost base leads us to conclude that management has yet to address the structural inefficiencies within the group,’ HSBC analyst Claire Kane said.

‘This presents a key opportunity for the new management team to drive return on tangible equity above 11% by the 2022 full year, leading to a re-rating of the shares.’

Credit Suisse and other analysts are expecting HSBC to unveil an ambitious cost-cutting programme in its full-year results next week targeting savings of around $6 billion by 2020. To achieve this, HSBC is likely to announce further job cuts as part of a major restructuring plan.

‘We forecast net cost savings to come principally from the UK head office, which we estimate increased by around 30% during Strategy 2015,’ said Kane. ‘A reduction in management layers and back-office personnel should limit the revenue loss relative to the previous restructuring.’

HSBC: technical analysis

HSBC shares have enjoyed a relatively buoyant start to February, with the stock regaining much of the ground lost in January.

However, this fails to mask the wider declines we have seen for this bank, with the stock trading 17% off the £7.09 highs seen two years ago, according to senior market analyst Josh Mahony.

‘There could be some hope through, with the rally taking us within touching distance of the crucial £6.03 swing-high from December,’ Mahony said. ‘A break through that level would bring about a more bullish outlook, yet there are distinct risks that remain until that happens.’

‘The creation of lower highs in play throughout the past nine months points towards a high likeliness of further downside from here, with trendline resistance coming into play,’ he added.

‘With that in mind, the downtrend looks likely to continue following this pullback, with a rise through £6.03 required to negate this outlook.’

Looking to trade HSBC and other UK bank stocks? Open a live or demo account with IG today.

The hourly timeframe provides a more granular look at the stock, with price having dropped out of an ascending channel.

Trendline support has now turned into resistance, with price likely to turn lower from here. Watch for a decline through the £5.84 support level to bring about a short-term bearish confirmation signal.

You can go long or short HSBC with IG using derivatives like CFDs and spread bets.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.