London open: FTSE slumps amid growing US-Iran tensions; HSBC slides

(Sharecast News) - London stocks tumbled in early trade on Tuesday, with banks under the cosh after disappointing results from HSBC, while growing tensions between the US and Iran dented sentiment.

At 0835 BST, the FTSE 100 was down 1.2% at 10,244.49, while Brent crude was 0.9% lower at $113.37 a barrel.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "Yesterday, the US announced it would escort ships through the Strait of Hormuz - calling it a humanitarian operation (!) Iran warned it would retaliate, and reports suggest the US went ahead regardless.

"Iran then struck ships and key oil infrastructure in Fujairah, UAE - notably a terminal that allows exports bypassing the Strait. Unsurprisingly, oil prices spiked, with US crude nearing $110pb and Brent $115pb. This morning, uncertainty remains high, though prices have eased slightly."

In equity markets, HSBC slid as it posted a surprise fall in quarterly earnings despite a spike in net interest income, after credit impairments rose at Europe's largest lender.

The bank saw revenues rise by an above-forecast 6% in the first quarter to $18.6bn, with net interest income 8% stronger at $8.9bn and an 18% hike in fees in its wealth division, to $2.7bn. However, pre-tax profits fell to $9.4bn from $9.5bn a year previously, missing forecasts for around $9.6bn, reflecting "higher expected credit losses and other credit impairment charges" in the quarter.

HSBC said expected credit losses had risen by $400m to $1.3bn, including a loss relating to a British fraud case and a $300m increase in allowances "to reflect heightened uncertainty and a deterioration in the forward economic outlook due to the onset of the conflict in the Middle East". It also flagged wider geopolitical tensions and higher trade tariffs.

Other banks followed suit, with Lloyds, Barclays and NatWest also lower.

Legal & General was knocked lower by a downgrade to 'underperform' at Jefferies.

On the upside, Intertek surged after Swedish private equity firm EQT sweetened its takeover proposal for the inspection, product testing and certification group. EQT's latest offer of 5,800p was up from previous offers of 5,400p and 5,150p per share.

Plus500 edged up after saying it remains confident in its outlook for FY26 following a better-than-expected performance in the first quarter. The fintech group had already lifted its full-year profit outlook in April, saying it expected 2026 revenue and earnings before interest, tax, depreciation and amortisation to be ahead of market expectations of $779.3m and $360.4m respectively.

Vodafone gained after agreeing to buy CK Hutchison's stake in mobile operator and broadband provider VodafoneThree for £4.3bn, taking full ownership of the joint venture. Currently, Vodafone has a 51% stake in the JV, while Hong Kong conglomerate CK Hutchison owns the rest.

Market Movers

FTSE 100 (UKX) 10,244.49 -1.15%

FTSE 250 (MCX) 22,511.71 -0.09%

techMARK (TASX) 5,899.82 0.61%

FTSE 100 - Risers

Intertek Group (ITRK) 5,142.00p 6.49%

BT Group (BT.A) 227.75p 5.35%

Compass Group 11 (CPG) 28.91p 2.42%

Relx plc (REL) 2,758.00p 2.41%

Rightmove (RMV) 437.30p 1.75%

Autotrader Group (AUTO) 502.60p 1.74%

The Sage Group (SGE) 905.00p 1.50%

Pearson (PSON) 1,129.50p 1.35%

Spirax Group (SPX) 7,186.00p 1.16%

Vodafone Group (VOD) 119.30p 1.05%

FTSE 100 - Fallers

HSBC Holdings (HSBA) 1,289.00p -5.40%

Lloyds Banking Group (LLOY) 95.68p -2.78%

Fresnillo (FRES) 3,181.00p -2.55%

Smurfit Westrock (DI) (SWR) 2,812.00p -2.53%

Anglo American (AAL) 3,524.00p -2.51%

Standard Chartered (STAN) 1,827.00p -2.39%

Legal & General Group (LGEN) 248.90p -2.35%

InterContinental Hotels Group (IHG) 141.70p -2.24%

NATWEST GROUP (NWG) 556.00p -2.22%

Lion Finance Group (BGEO) 10,610.00p -2.21%

FTSE 250 - Risers

NCC Group (NCC) 136.60p 5.75%

Ceres Power Holdings (CWR) 659.00p 4.08%

AEP Plantations (AEP) 1,860.00p 3.48%

JPMorgan Emerging Markets Dividend Income (JEMI) 196.00p 3.43%

Trustpilot Group (TRST) 267.00p 2.92%

Energean (ENOG) 908.00p 2.89%

Premier Foods (PFD) 198.40p 2.88%

Wetherspoon (J.D.) (JDW) 601.50p 2.65%

Kainos Group (KNOS) 844.00p 2.41%

Partners Group Private Equity Limited. (EUR) (PEY) 8.54p 2.40%

FTSE 250 - Fallers

Chrysalis Investments Limited NPV (CHRY) 82.10p -6.17%

Carnival (CCL) 1,873.50p -5.76%

BlackRock Greater Europe Inv Trust (BRGE) 539.00p -2.88%

Hochschild Mining (HOC) 599.50p -2.83%

Investec (INVP) 613.50p -2.70%

BlackRock Smaller Companies Trust (BRSC) 1,250.00p -2.65%

Patria Private Equity Trust (PPET) 600.00p -2.60%

THG (THG) 30.10p -2.46%

TBC Bank Group (TBCG) 4,674.00p -2.39%

Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 302.00p -2.27%