(Alliance News) - Stock prices in London were seen opening lower on Monday, with the FTSE 100 giving back some of Friday's advance, as economic data from China disappointed.
Equities in Asia were largely higher, and HSBC shares rose in Hong Kong. The China-focused lender vowed to up returns to shareholders, as it looks set to benefit from the current interest rates cycle.
IG futures indicate the FTSE 100 index will open 18.0 points, 0.2%, lower at 7,405.43. The index closed up 78.18 points, or 1.1%, at 7,423.43 on Friday. It climbed 2.0% last week and 3.5% over the whole of July.
Monday's economic calendar has a series of manufacturing PMIs, including the eurozone at 0900 BST, the UK at 0930 BST, and the US at 1445 BST.
Already out, China's manufacturing sector saw momentum fade in July as Caixin's purchasing managers' index slipped dangerously close to the no-change mark of 50.0.
Caixin's PMI fell to 50.4 points in July from 51.7 in June, indicating just marginal growth was achieved last month.
CMC Markets analyst Michael Hewson commented: "The economic data is likely to continue to deteriorate with the latest manufacturing PMI numbers for Spain, Italy, France and Germany all expected to slip into contraction territory for July."
The dollar's post-Fed slide has continued.
The pound was quoted at USD1.2185 early Monday, up from USD1.2163 at the London equities close on Friday. The euro traded at USD1.0224, up from USD1.0196. Against the yen, the greenback faded to JPY132.53 from JPY133.45.
In the afternoon before the US Federal Reserve interest rate decision last Wednesday, the pound bought just USD1.2059.
"The EUR/USD is trading well off from its lows of the last month and also from its parity level, but we think that the path of the least resistance is still skewed to the downside as the EU is unlikely to avoid a recession. The economic headwinds are too strong for the EU, and they are going to drag the euro lower," Avatrade analyst Naeem Aslam commented.
"In the UK, the [Bank of England[ is expected to step up its fight against inflation and it is widely anticipated that BOE will increase the interest rate during its next meeting by 50 basis points. The meeting will take place on Thursday, and it will be the biggest event for sterling traders. If the bank increases the rate by 50 basis points on Thursday, it will be the biggest hike in the bank's history since 1995."
In Tokyo on Monday, the Nikkei 225 was 0.6% higher in late trade. The S&P/ASX 200 was also up 0.6% in late dealings. In China, the Shanghai Composite was up 0.2%, while the Hang Seng Index in Hong Kong edged down 0.1%.
HSBC rose 3.4% in Hong Kong.
In the six months to June 30, HSBC's pretax profit fell to USD9.18 billion from USD10.84 billion a year before.
Keeping a lid on profit was HSBC reserving for USD1.09 billion in expected credit losses, swinging from a USD719 million release the year prior. The bank said the provision reflects "heightened economic uncertainty and inflation".
In the first half, net interest income rose to USD14.45 billion from USD13.10 billion, aided by rising central interest rates around the world.
The bank declared an interim dividend of USD0.09, rising from the USD0.07 distributed a year prior. Looking ahead, HSBC said it is targeting a payout ratio guidance of around 50% for 2023 and 2024.
"We understand and appreciate the importance of dividends to all of our shareholders. We will aim to restore the dividend to pre-Covid-19 levels as soon as possible. We also intend to revert to quarterly dividends in 2023," Quinn said.
Meanwhile, shares in Alibaba declined 2.9% in Hong Kong. US authorities put the Chinese technology firm on a watchlist that could see it delisted in New York if it does not comply with disclosure orders.
The US securities watchdog on Friday said it added the Chinese firm to a list of more than 250 others that could be booted from Wall Street – where it listed in 2014 – if strict auditing requirements were not met for three consecutive years.
The announcement comes as relations between Washington and Beijing are dragged lower by a range of issues including technology, human rights and Taiwan.
Brent oil was quoted at USD103.06 a barrel early Monday, down from USD105.24 late Friday. Gold stood at USD1,760.61 an ounce, down from USD1,763.38.
Monday's local corporate calendar has half-year results from education publisher Pearson and precision instrument supplier Spectris.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
HSBC Holdings (HSBA)
