Five Things You Need to Know to Start Your Day
Pound plunges, stocks rise and HSBC has a big profit miss. Here are some of the things people in markets are talking about today.
On Sunday, Mayor of London and Conservative-voter darling Boris Johnson announced that he would be campaigning for Britain to leave the European Union in June's referendum. The pound slid the most since 2010 in trading this morning, dropping at least 1.2 percent against all its major peers. At 11:38 a.m. in London the currency was down 2.0 percent to $1.4120.
Markets rose overnight in Asia with the MSCI Asia Pacific Index advancing 0.7 percent with shares on the Shanghai Composite Index rising to their highest level in a month following a reshuffle at the head of the markets regulator there. In Europe, the Stoxx 600 Index was 1.5 percent higher at 10:50 a.m. London time while the FTSE 100 gained 1.2 percent with mining stocks leading the advances. S&P futures are 1.4 percent higher.
HSBC Holdings Plc posted an unexpected pretax loss of $858 million, falling far short of analyst expectations for a profit of $1.9 billion. Shares in the bank dropped as much as 5.4 percent in London trading and were down 3.3 percent at 11:00 a.m. local time. The profit miss is not the only problem facing the bank, which also announced it has increased the number of employees earning more than €1 million ($1.1 million) to 453. The U.S. securities regulator said that it is investigating the company's Asia Pacific hiring practices. The investigation concerns the bank's hiring of people that have close government ties. HSBC said that "it is not practicable at this time for HSBC to predict the resolution of this matter, including the timing or any possible impact on HSBC, which could be significant.”
Markit Economics published their Purchasing Managers Index for the euro zone which showed the composite index dropped to 52.7 in February, from 53.6 previously and below expectations for 53.3 in a survey of economist conducted by Bloomberg. Markit’s German factory index fell to 50.2 this month, barely above the key 50 level that divides expansion from contraction. The weaker German number is also reflected in investment data, which shows capital spending as a share of output remaining stubbornly low.
Industrial metals are rising, with iron ore trading above $50 a ton for the first time since October, while zinc moved into bull-market territory adding as much as 1.7 percent to $1,774 a metric ton. Oil futures rose, with WTI for March delivery adding 98 cents a barrel to reach $30.62 at 11:20 a.m. in London. Gold is down.
What we've been reading
This is what's caught our eye over the weekend.
- Sovereign wealth funds may sell $404 billion of equities.
- That didn't go as planned: Mexico's oil monopoly ends, then oil tanks.
- How North Korea gets cash into and out of the country.
- Emerging markets caught between a rock and some harsh ratings.
- Fear and loathing of negative-yield debt: The bond traders dilemma...
- ...But they're still rather get nothing than buy European equities.
- Donald Trump gains momentum.
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