FTSE 100 slides as HSBC's results, inflation fears dent sentiment

Tue, 05th May 2026 17:31

May 5 (Reuters) - The UK's FTSE 100 ⁠slid more than 1% on Tuesday, as traders returned from a bank holiday to witness a rout in financial stocks driven by ‌HSBC's surprise loss and concerns about the U.S.-Iran conflict.

The blue-chip FTSE 100 dropped 1.4% ⁠to 10,219.1 points at the close, clocking its biggest ⁠one-day drop since late March. The midcap FTSE 250 shed 0.4%.

* HSBC's shares fell 5.9% after the British bank reported an unexpected $400 million loss linked to a fraud case, raising further questions about lenders' ‌private credit exposure.

* The overall bank index dropped 4.6% to a near one-month low.

* The broader market was also responding to growing tensions in the Middle East, with the United Arab Emirates saying it was under attack from Iranian missiles and drones, even as Washington said a shaky ceasefire was intact despite ‌an exchange of fire the previous day.

* Brent crude futures retreated, but held near $110 a barrel, stoking concerns that elevated ‌energy prices would fuel inflation and force major central banks to maintain a tighter monetary policy.

* Traders are pricing in two or possibly three interest rate hikes by the Bank of England by the end of 2026.

* Travel-related stocks fell on concerns ‌about higher fuel costs. Cruise operator Carnival and British Airways operator IAG dropped 3.7% and 1.6%, respectively.

* Britain's Intertek jumped almost 6% after the company said it was ⁠reviewing ⁠a revised takeover bid from Swedish private equity group ‌EQT AB.

* Britain's largest broadband and mobile provider, BT Group , climbed 1.7% after BofA Global Research upgraded the stock to "buy", citing the potential for a higher dividend payout.

* Vodafone dipped ‌2.2% after the telecoms company agreed to buy its partner CK Hutchison's stake in VodafoneThree for 4.3 billion pounds ($5.8 billion). (Reporting by Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Shinjini Ganguli and Alison Williams)