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(Alliance News) - Stocks in London were set to open slightly higher on Tuesday, following a strong set of results for lender HSBC, as investors look ahead to the latest inflation reading for the eurozone.
IG says futures indicate the FTSE 100 index of large-caps to open up 16.1 points, 0.2%, at 7,886.67 on Tuesday. The FTSE 100 added 38.99 points, or 0.5%, at 7,870.57 on Friday.
Markets in London, Paris and Frankfurt were shut on Monday for a holiday weekend.
HSBC on Tuesday announced the reinstatement of a quarterly dividend and a USD2 billion share buyback programme amid surging first-quarter profit.
In the first quarter of 2023, the bank said pretax profit more than tripled to USD12.89 billion from USD4.14 billion a year before. This was well above market consensus of USD8.64 billion.
"This included a USD2.1 billion reversal of an impairment relating to the planned sale of our retail banking operations in France, as the completion of the transaction has become less certain, and a provisional gain of USD1.5 billion on the acquisition of Silicon Valley Bank UK Ltd," HSBC explained.
The bank reported net interest income rose 38% year-on-year to USD8.96 billion from USD6.48 billion. Market analysts had been expecting USD8.85 billion, according to company-compiled consensus.
Overall net operating income reached USD19.74 billion, compared to USD11.67 billion a year before.
Shares in HSBC were up 3.0% in Hong Kong, while the Hang Seng index in Hong Kong was up 0.4%.
Elsewhere in Asia on Tuesday, the Nikkei 225 index was up 0.2% in Tokyo. In China, Shanghai remained closed for the Labour Day holiday.
The S&P/ASX 200 in Sydney was down 0.9%. The index had dropped deeper into the red following the announcement of a surprise interest rate hike by the Reserve Bank of Australia.
The RBA lifted the key interest rate by 25 basis points to 3.85%, wrong-footing many economists who predicted there would be no change. Figures released in late April showed that consumer price inflation slowed to 7.0%, from 7.8% in December but still stubbornly above the bank's target of between 2% and 3%.
Reserve Bank Governor Philip Lowe said inflation had "passed its peak", but was still too high.
"Given the importance of returning inflation to target within a reasonable timeframe, the board judged that a further increase in interest rates was warranted today," he said.
The dollar was stronger in early exchanges in Europe.
Sterling was quoted at USD1.2504 early Tuesday, lower than USD1.2575 at the London equities close on Friday. The euro traded at USD1.0991, lower than USD1.1040. Against the yen, the dollar was quoted at JPY137.67, up versus JPY136.18.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.1%, the S&P 500 marginally lower, and the Nasdaq Composite down 0.1%.
Gold was quoted at USD1,983.72 an ounce early Tuesday, edging lower from USD1,990.27 late Friday. Brent oil was trading at USD79.32 a barrel, lower than USD79.87.
In Tuesday's corporate calendar, there are first-quarter results from oil major BP.
In the economic calendar on Tuesday, there are UK house prices at 0700 BST, followed by the latest series of manufacturing purchasing managers' index prints from the UK, EU and Germany. There's also flash eurozone inflation at 1000 BST.
By Elizabeth Winter, Alliance News senior markets reporter
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