The declaration of a 'major incident' in Greater Manchester where covid-19 infections are rising in various clusters has not helped brittle confidence among traders in London. Despite Asian markets performing solidly overnight - Japan's Nikkei closed more than 2 per cent higher - the FTSE 100 sold off shortly after the open, building on last week's selling momentum which means the blue chip index is now down more than 4 per cent over the past five trading days.
Although authorities in Manchester are describing the alert level as normal practice to ensure all services are aligned in their actions to fight against the rise in infections, coming on the back of Thursday evening's reintroduction of lockdown measures across several northern metropolitan areas it has raised concerns of a second wave of infections hitting the UK.
HSBC is the last major UK bank to announce results and today it followed in the footsteps of its peers by announcing chunky impairments against bad debts, which are expected to spike as the global economy tries to right itself.
UK Company Announcements
| HSBC (HSBA) | Pre-tax profits declined 65 per cent over the first half of the year, after it took $6.9bn in impairments for future loan losses. Income was also down 9 per cent after a reduction in interest rates meant the net interest margin thinned to 18 basis points to 1.43 per cent. The lender also warned of the potential threat of US-China and UK-China trade relations on performance during the second half. |
| Hammerson (HMSO) | Ahead of the release of its interim figures on Thursday, the group confirmed press speculation that it was in talks to dispose of its 50 per cent stake in its joint venture partner APG. It is also considering raising equity via a rights issue. |
| XP Power (XPP) | The power supply equipment manufacturer reinstated its dividend at its half-year results and will pay 18p per share. XP Power's interim revenue grew 6 per cent to £105m, with order intake up 45 per cent to £146m. |
| Senior (SNR) | The group swung to a £126m operating loss in the six months to 30 June versus a £39m profit a year earlier. This was thanks to an £111m impairment on its aerospace business. Compounding the grounding of Boeing’s (US:BA) 737 Max jet, the Covid-19 pandemic saw civil aerospace sales collapse by 42 per cent. |
In the US all eyes will be on the tech sector again with Microsoft's potential acquisition of the US, Canadian and Australian operations of video sharing app TikTok from Chinese owner ByteDance said to still be under discussion despite President Trump declaring some reservations about the deal during a call with Microsoft boss Satya Nadella, according to a Financial Times report.
The technology sector has driven the US stock market recovery from its coronavirus crisis lows in the Spring but there are growing questions - as highlighted in our cover feature this week - over how sustainable the recent growth of the tech giants is. There are also some concerns, as James Norrington points out in this feature, over the potential impact of the upcoming presidential election on US markets.
Neil Wilson is on holiday until Tuesday 11 August
