HSBC Holdings Share News (HSBA)

LONDON (Alliance News) - Clothing retailer Next and lender HSBC Holdings led a positive start for blue-chip stocks in London Wednesday, both rising 3.8%, after well-received interim updates.

HSBC reported a drop in profit but committed to maintaining its dividend at its current level for 2016. Next reported growth in sales in the first half of its financial year, while narrowing its full-year profit and sales guidance.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.3% at 6,665.88
FTSE 250: down 0.2% at 17,035.26
AIM ALL-SHARE: up 0.1% at 758.54
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Hang Seng: down 1.5% at 21,794.09
Nikkei 225: closed down 1.9% at 16,083.11
DJIA: closed down 0.5% at 18,313.77
S&P 500: closed down 0.6% at 2,157.03
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GBP: flat at USD1.3303 (USD1.3314)
EUR: soft at USD1.1202 (USD1.1225)

GOLD: flat at USD1,363.00 per ounce (USD1,366.31)
OIL (Brent): flat at USD41.77 a barrel (USD41.70)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
(all times in BST)

0845 Italy Markit services PMI
0850 France Markit services and composite PMI
0855 Germany Markit services and composite PMI
0900 EU Markit services and composite PMI
0930 UK Markit services PMI
1000 EU retail sales
1200 US MBA mortgage applications
1315 US ADP employment change
1445 US Markit services and composite PMI
1500 US ISM non-manufacturing PMI
1530 US EIA crude oil stocks
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The UK economy is set to experience a marked slowdown in the second half of this year and throughout 2017, the National Institute of Economic and Social Research said. Gross domestic product is forecast to grow 1.7% this year, slowing to just 1% in 2017. GDP is likely to decline 0.2% in the third quarter of this year and there is a risk of a further deterioration. "There is an evens chance of a 'technical' recession in the next 18 months, while there is an elevated risk of further deterioration in the near term," Simon Kirby, head of macroeconomic modelling and forecasting at NIESR, said.
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Shop prices in the UK fell 1.6% on year in July, the British Retail Consortium said. That follows the 2.0% decline in June. Food prices were down 1.2% on year, the data showed, while non-food prices slid 2.2%. "The long stretch of deflation continued in July with shop prices falling once again," said British Retail Consortium chief executive Helen Dickinson. "This is testament to the strength of competition between retailers, which is as fierce as it has ever been."
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UK Prime Minister Theresa May's economic and industrial strategy is set to focus on boosting growth in Britain's regions, and in particular areas that have "not shared in recent industrial success", Downing Street has said. At the inaugural meting of the Prime Minister's Cabinet committee on economy and industrial strategy, May stressed the government should focus on delivering "an economy that works for all".
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China's private sector expanded at the fastest pace since September 2014 in July despite moderation in services activity growth. The Caixin composite output index rose to 51.9 in July from 50.3 in June, survey data released by Markit showed. A reading above 50 indicates expansion in the sector. The improvement was driven by a marked expansion in the manufacturing sector, while the services sector grew at a slower pace. The latest survey from Caixin showed a services PMI score of 51.7, down from 52.7 in June.
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Japanese Prime Minister Shinzo Abe is set to reshuffle his cabinet Wednesday after his ruling Liberal Democratic Party's overwhelming victory in the July upper house elections, local media reported. Abe is expected to retain most of his current key ministers, including Foreign Minister Fumio Kishida, Chief Cabinet Secretary Yoshihide Suga and Finance Minister Taro Aso, who also serves as deputy prime minister, Kyodo News agency reported.
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Members of the Bank of Japan's monetary policy board are expecting the decade-plus blight of deflation to persist for a bit longer, minutes from the central bank's June 15 and 16 meeting revealed. The bank's considerable efforts to fight deflation were derailed last year by plummeting energy prices that have yet to recover. "On the price front, the year-on-year rate of change in the consumer price index is about 0%. Although inflation expectations appear to be rising on the whole from a somewhat longer-term perspective, they have recently weakened," the minutes said. The bank added that the Japanese economy continues to recover at a moderate pace, although exports and production are expected to remain sluggish.
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US President Barack Obama said Republican presidential nominee Donald Trump is "unfit" to be president and "he keeps on proving it." At a White House news conference, Obama questioned why party leaders continue backing Trump even after their repeated denunciations of his statements.
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BROKER RATING CHANGES
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S&P GLOBAL CUTS INTERCONTINENTAL HOTELS TO 'HOLD' - TARGET 3250 (2800) P
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TRADERS: MACQUARIE CUTS DIRECT LINE TO 'UNDERPERFORM' ('NEUTRAL')
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TRADERS: CITIGROUP CUTS DRAX GROUP TO 'SELL' ('NEUTRAL')
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TRADERS: CITIGROUP RAISES SSE TO 'NEUTRAL' ('SELL')
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TRADERS: CITIGROUP CUTS UNITED UTILITIES TO 'SELL' ('NEUTRAL')
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UBS RAISES LAIRD TO 'BUY' ('NEUTRAL') - TARGET 350 (375) PENCE
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COMPANIES - FTSE 100
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HSBC Holdings scrapped its return on tangible equity target amid challenging economic conditions and continued low interest rates, while the bank's second-quarter profit missed expectations and it launched a USD2.50 billion share buyback. HSBC Chairman Douglas Flint said the board of the UK-headquartered, Asia-focused bank had decided that "in light of the current uncertain economic and geo-political environment", coupled with the bank's view that interest rates will remain low for a long time, it has removed its target of reaching a return on tangible equity in excess of 10% by the end of 2017. HSBC said pretax profit for the half-year to the end of June was USD9.71 billion, down from USD13.63 billion a year earlier. Adjusted pretax profit, in constant currencies and stripping out one-off items, fell to USD10.80 billion from USD12.55 billion a year prior. HSBC committed to maintaining its dividend at its current level for the remainder of the year. It declared an interim dividend of 0.31 US cents per share.
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Rio Tinto cut its interim dividend as its reported a steep drop in underlying earnings in the first half of 2016, but the company reported a large rise in net earnings in the half and committed to its previous guidance concerning the dividend for the year. The dividend was slashed by more than half to 45.0 cents per share from 107.5 cents last year. The miner also said production and shipments of iron ore from the Pilbara operation in Australia were both considerably higher in the first half of the year, as was production of a number of other commodities. The multi-commodity miner reiterated its production guidance for the full year 2016 across all of its divisions, apart from thermal coal which was increased.
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Clothing and homeware retailer Next reported growth in sales in the first half of its financial year but narrowed its full-year profit and sales guidance in what it called an "extremely volatile" market. Next said total sales in the 26 weeks ended July 30 rose by 1.8% year-on-year, as 5.4% growth in Next Directory offset a 0.7% decline in Next Retail. Full-price sales, however, slipped by 0.3% as these within Directory grew by 4.9% but fell within Retail by 4.0%, meaning Next entered into its end-of-season sale with significantly more stock than last year. Next said trading remains extremely volatile due to a weakness in consumer demand for clothing, which it expects to continue for the rest of the year.
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COMPANIES - FTSE 250
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The UK Competition & Markets Authority late Tuesday said it has accepted in principle the remedies tabled by interdealer brokers Tullett Prebon and ICAP to secure passage for their merger of some business activities. Tullett is buying ICAP's hybrid voice broking and information business. In June, the pair offered to sell ICAP's London-based oil desks in a bid to address competition concerns raised by the UK's antitrust regulator. Earlier that month, the CMA said it was considering launching an in-depth probe of the deal, raising concerns the combination could reduce competition for the voice-hybrid broking of oil products.
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Moneysupermarket.com Group said its chief executive is to step down by May 2017 as the price comparison website reported growth in pretax profit in the first half of 2016. Peter Plumb will step down on or before the company holds its annual general meeting in May 2017, it said. Plumb has been CEO since 2009, and Moneysupermarket said the formal process to identify a successor will start immediately. News of Plumb's departure came as Moneysupermarket said pretax profit for the six months to the end of June rose 25% year-on-year to GBP37.9 million from GBP30.2 million, as revenue increased 10% to GBP157.6 million from GBP143.9 million. The company declared an interim dividend of 2.75 pence per share, up from 2.55p a year prior.
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Low-cost airlines Ryanair Holdings and Wizz Air Holdings reported growth in the number of passengers they carried year-on-year in July. Irish carrier Ryanair said the number of customers it carried grew by 12% in July to 11.3 million from 10.1 million in the same month in 2015, as load factor rose by one percentage point to 96% from 95%. Central and Eastern Europe-focused carrier Wizz Air reported a 16% rise in passengers in July to 2.3 million from 2.0 million a year earlier, while load factor remained flat at 92.7%.
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COMPANIES - INTERNATIONAL
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Credit Agricole reported that its net income group share totalled EUR1.16 billion in the second quarter of 2016, a 26% increase on its second quarter 2015 level. The company noted that this figure included its Visa capital gain of EUR328 million. Excluding the gain and other items, underlying earnings was EUR818 million, a 13% increase on the second quarter of 2015. Credit Agricole reported revenue of EUR4.74 billion for the quarter.
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French lender Societe Generale reported net income for the half year rose to EUR2.385 billion from last year's EUR2.219 billion. Excluding non-economic items, net income rose 26% to EUR2.428 billion. Operating income increased 7.5% to EUR3.568 billion, while gross operating income edged up 2.1% to EUR4.756 billion.
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French insurer AXA Group reported its net income for the half year rose 4% to EUR3.2 billion, driven by the positive impact from the gain on the sale of two properties in New York City. The property gain was partly offset by the net impact of the disposal of the UK Life & Savings and Portuguese operations. Total revenue for the half year stood at EUR54 billion. While Life & Savings revenues and Asset Management revenues were down 2% and 8%, respectively, Property & Casualty revenues and International Insurance revenues were up 4% and 5%, respectively.
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Dutch banking firm ING Group reported its net result for the second-quarter was EUR1.295 billion, compared with EUR358 million in the second quarter of 2015. Total underlying income grew to EUR4.547 billion from EUR4.171 billion last year.
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Deutsche Post DHL Group reported its second-quarter consolidated net profit climbed 66% to EUR541 million from EUR326 million last year. Profit from operating activities or EBIT increased 40% to EUR752 million euros from EUR537 million last year. Revenue declined 3.5% to EUR14.19 billion from EUR14.70 billion a year ago. Further, the company reconfirmed its revenue and earnings guidance for all of 2016.
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South Korean conglomerate Samsung Electronics unveiled the New Galaxy Note7, which will be available starting on August 19.
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Wednesday's Shareholder Meetings

NewRiver Retail (re new corporate structure)
Walker Crips Group
red24
GLI Alternative Finance (re investment restrictions change)
Monks Investment Trust
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By Tom Waite; thomaslwaite@alliancenews.com; @thomaslwaite

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