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LONDON (Alliance News) - HSBC Holdings Wednesday reported a 20% drop in first-quarter pretax profit, driven by a weak performance Asia, Latin America and its investment bank, that was only partially offset by lower impairment charges and continued cost cutting.

In a statement, HSBC, which is the UK's largest bank by market capitalisation, said first-quarter pretax profit fell to USD6.79 billion, from USD8.43 billion in the corresponding quarter a year earlier. The bank also said it continued to experience "muted" customer activity in April.

Supermarket chain J Sainsbury, meanwhile, reported higher pretax profit for its recent financial year, as the group's convenience stores and online offering continued to drive growth. Pretax profit rose 16% to GBP898 million, outperforming a 2.8% increase in sales to GBP23.95 billion.

However, like-for-like sales including VAT and excluding fuel grew only 0.2%, and the UK's third-largest supermarket chain said it is forecasting similar growth again for the year ahead.

The grocer said that conditions in the retail food sector are likely to remain challenging for the foreseeable future, but reiterated that it is still confident in outperforming peers in the year ahead.

"Of course we will match our competitors toe to toe, but we will do that through brand match...In the end that is what the strength of this brand is built on," Chief Executive Justin King said.

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FTSE 100: down 0.2% at 6,782.40
FTSE 250: down 0.3% at 15,899.26
AIM ALL-SHARE: down 0.6% at 815.00
GBP-USD: up at 1.6969
EUR-USD: up at 1.3930
GOLD: down at USD1,304.09 an ounce
OIL (Brent): up at USD107.45 a barrel
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Key UK Corporate News

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FTSE 100: Legal & General Group expects to write more than enough bulk-purchase annuities to offset an expected decline in the individual annuities market in the wake of UK regulatory changes. It said bulk purchase annuity premiums increased to GBP3.05 billion in the three months to end-March, from GBP357.0 million a year earlier, boosted by a GBP3.00 billion deal for the ICI Pension Fund announced in March. However, individual annuity sales fell by 40% to GBP244.0 million as people cancelled GBP15.0 million annuities taken out prior to changes made in the Budget. EasyJet flew more passengers and filled more of its planes in April compared with the previous year thanks to this year's late Easter, but its passenger numbers also grew strongly over the 12 months to the end of April. G4S has performed in line with its plans during the first quarter of 2014, boosted by a series of contract wins in countries including the US, Brazil, the Middle East and with the UK government. It said revenues were up 4.8% on the first quarter in 2013, with organic growth up 5.0%. ITV has agreed to acquire a controlling stake in reality TV producer Leftfield Entertainment Group for USD360 million. BAE Systems said that, excluding the impact of foreign exchange rates, it has traded in line with expectations so far in 2014. Vodafone has renewed its strategic alliance with French telecoms company SFR for a further four years. Experian reported an increase in full-year pretax profit, but warned it faces a number of constraints on growth in the short-term, not least the impact of the World Cup on its business in Brazil. CRH reported a 10% increase in European like-for-like sales in the first four months of the year, as economic conditions across the region continued to improve, but it said it has experienced problems in the US. Rolls-Royce Holdings has now signed an agreement to sell its energy gas turbine and compressor business to German engineering firm Siemens AG in a deal worth GBP785 million in cash. Meggitt said trading during the first fourth months of 2014 has been broadly in line with expectations, but warned revenue for the year is expected to be hit by disposals made during 2013 and the effect of the recent strengthening of sterling against the dollar, euro and Swiss franc.

FTSE 250: Inmarsat first quarter revenue rose 9.9%, driven by its wholesale mobile satellite services business and stronger retail operations. John Wood Group has confirmed the establishment of EthosEnergy, its gas turbine services joint venture with Siemens. esure Group blamed competition in motor and home insurance as it reported a slight drop in first-quarter gross written premiums but left its outlook for the remainder of the year unchanged. Rightmove said the positive start to 2014 it highlighted earlier in the year has continued, with page impressions and average revenue per advertiser both up in the year to date. BBA Aviation said overall trading in the first four months of the year was in line with its expectations, with group revenue up 1% on the previous year and 2% on an organic basis, but it said European market remains weak. Carillion said it is trading in line with expectations this year, and expects to resume revenue growth in 2014, including the resumption of revenue growth in UK construction. But Carillion warned that first half revenue is likely to be slightly lower than in the first half of 2013, due to the rescaling of its UK construction activities. ICAP monthly electronic broking volumes decreased by 5.0% year-on-year and 9.0% month-on-month in April.

AIM All-Share: Accsys Technologies is doing well after its loss narrowed in its recent financial year thanks to strong growth in revenues. Corero Network Security is up after it appointed David Larson, previously chief technology officer for Hewlett-Packard Networking, to the role of chief technology officer and vice president, product. Petro Matad is a big faller after it said its 2D seismic studies in Mongolia had confirmed some oil prospects, but it is continuing to search for development partners in the region, meaning it is having to focus on cash preservation. EKF Diagnostics Holdings is another big faller after it warned that reimbursement by Medicare for its recently acquired Selah Genomic's drug metabolism genetic biomarkers panel has been reduced sharply in North Carolina, South Carolina, West Virginia and Virginia. The cut in reimbursement level has no impact on management expectations for EKF as a whole, it said. Richland Resources is down after it said its production and grades improved in the first quarter, but its total sales fell and the effect of illegal mining activities continued to blight its Merelani tanzanite mine. Alecto Minerals is another faller, even though it said its initial cyanide leach tests at Gourbassi East have shown the potential for low-cost recovery at the Kossanto gold Project in Mali.
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Top Economics And General
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Overall shop prices in the UK were down 1.4% on year in April, the British Retail Consortium said. That missed forecasts for a decline of 0.8% following the 1.7% contraction in March. Overall, it was the 12th straight month that shop prices have declined. On a monthly basis, shop prices were down 0.5%. Clothing prices were down 0.8% on month in April after dipping 0.3% in March.
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Fighting broke out again in eastern Ukraine Wednesday as pro-Russian insurgents from Sloviansk attacked government forces surrounding the rebel-held city. A rebel representative in Sloviansk told the Russian Interfax news agency that the fighting was concentrated around a television tower in the southern suburb of Andreyevka. "We are taking the checkpoints back under our control," he said. There was no immediate information on casualties, nor did the Ukrainian government comment on the reports. Interior Minister Arsen Avakov, who has been coordinating the operation in the region, said Monday that the television tower had been retaken and was broadcasting Ukrainian channels.
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The US and the EU on Tuesday condemned plans for an independence referendum called by separatist leaders in two eastern Ukraine regions - Donetsk and Luhansk. "We flatly reject this illegal effort to further divide Ukraine," US Secretary of State John Kerry said. "And its pursuit will create even more problems in the effort to try to de-escalate the situation." No civilized nation will recognize the results of "such a bogus effort," Kerry said. The Ukrainian leadership has admitted that it no longer controls the two regions and accuses Russia of aiding and arming the separatists, which Moscow denies.
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South Africa's ruling African National Congress predicted a strong victory Wednesday, as voters headed out for the nation's fifth general election since the end of apartheid 20 years ago. "The results will be very good," President Jacob Zuma said as he cast his vote in his rural homestead in Nkandla. Helen Zille, leader of the main opposition Democratic Alliance, declined to predict the election results as she voted in Cape Town.
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Members of the Bank of Japan's monetary policy board said the country's economic recovery appears to be continuing at a moderate pace, minutes from its meeting on April 7 and 8 revealed. The country may finally be winning its decade-old war against deflation, the board noted, as expectations continue to suggest an increase in prices. The members did caution, however, that the consumption tax hike that went into effect in April may result in a decline in demand.
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Free trade talks between Japan and the EU are due to dominate a summit Wednesday between Japanese Prime Minister Shinzo Abe and the bloc's top officials in Brussels, with attention expected to turn also to events in Ukraine. "An ambitious free trade agreement will unleash the full potential of the trade and economic relationship between the EU and Japan," said European Commission President Jose Manuel Barroso ahead of the talks.
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Thai caretaker Prime Minister Yingluck Shinawatra was sacked by a Constitutional Court ruling that she illegally transferred a civil servant three years ago. The guilty verdict also removes nine of her cabinet members from office. The remaining 26 cabinet members will continue in a caretaker capacity until a new government takes office. The cabinet nominated Deputy Prime Minister Niwatthamrong Boonsongpaisan, to replace the ousted prime minister.
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Islamist extremist group Boko Haram has killed more than 200 people in a raid on a village in north-eastern Nigeria, local newspaper Daily Trust reported. Gunmen in armoured vehicles, pick-up trucks and on motorcycles attacked the village of Gamboru in Borno State on Monday night, but details about the attack only became public on Wednesday. "People are still counting the dead bodies. They have counted over 200 and they have not finished yet," said Abdulrahman Terab, a federal lawmaker from Gamboru. Among the dead were 16 policemen.
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Afternoon Watchlist (all times British Summer Time)

15:00 US Fed's Yellen Speech
15:30 US EIA Crude Oil Stocks change
20:00 US Consumer Credit Change

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Thursday's Key UK Corporate Events

Perform Group Interim Management Statement
Provident Financial Interim Management Statement
Supergroup Trading Statement
Nature Group Full Year Results
Barclays Group Strategy Update
Avocet Mining Interim Management Statement
Randgold Resources Q1 Results
RSA Insurance Group Interim Management Statement
Sage Group Full Year Results
Standard Chartered Interim Management Statement
Barratt Developments Interim Management Statement
Beazley Interim Management Statement
IMI Interim Management Statement
WM Morrison Supermarket Interim Management Statement
BT Group Full Year Results
Serco Group Interim Management Statement
Prudential Interim Management Statement
Intu Properties Interim Management Statement
Promethean World Interim Management Statement
Bankers Petroleum Q1 Results

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Thursday's Key Economic Events (all times British Summer Time)

00:01 UK RICS Housing Price Balance
All Day France Victory in Europe Day
03:00 China Trade Balance
07:00 Germany Industrial Production
12:00 UK BoE Interest Rate Decision
12:00 UK BoE Asset Purchase Facility
12:25 US Fed's Evans Speech
12:30 US Fed's Tarullo speech
12:45 EU ECB Interest Rate Decision
13:30 EU ECB Monetary policy statement and press conference
13:30 US Initial Jobless Claims
14:30 US Fed's Yellen Speech
15:30 US EIA Natural Gas Storage change
19:00 US Fed's Bullard speech

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By Steve McGrath; steve.mcgrath@alliancenews.com; @stevemcgrath1

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