FTSE 100 close: London rises on HSBC profits in a busy week for central banks and energy giants
London’s FTSE indexes closed higher as markets looked ahead to another round of central bank rate decisions.
The FTSE 100 closed 0.50 per cent higher at 7,327.39 while the midcap FTSE 250 climbed 0.90 per cent to trade at 17,017.59.
This week will see rate decisions from the Bank of Japan, the Federal Reserve and the Bank of England on consecutive days as the battle against inflation enters a new phase.
Markets expect rates to be left on hold in the US and UK but for policymakers to signal their willingness to leave rates at elevated levels to stamp down on inflation.
“It’s a big week for interest rate decisions with the Fed announcing on Wednesday and the Bank of England on Thursday. Both are expected to keep rates unchanged, which should provide some relief to investors, although much of the focus will be on commentary about the path for rates going into 2024,” Russ Mould, investment director at AJ Bell
A number of large companies are also updating investors on their performance this week, including Shell, BP and Apple.
Airtel Africa climbed to the top of the FTSE 100 after reporting robust growth in the first half of the year. Its shares were up 4.6 per cent.
Elsewhere HSBC revealed that profits more than doubled on last year thanks to the impact of higher interest rates. The bank unveiled a $3bn share buy-back scheme. Its shares closed 2.7 per cent.
Matt Britzman, equity analyst at Hargreaves Lansdown, said: “There wasn’t much in these results to upset the apple cart and the fresh buy-back is testament to a strong capital position.”
HSBC’s results cap off a mixed bag for the FTSE’s banking stocks, with fears that the boost from rising interest rates is slowly tailing off.
Publishing firm Pearson lifted its guidance for the full year by £20m despite reporting a slowdown in revenue growth across the third quarter.
The firm reported that vocational training and English language learning qualifications were still being taken up in force. Its shares were 2.3 per cent higher.
“A time when economic wheels creak is often a time when we see increased demand for upskilling and retraining, which means that even in the face of a recession, Pearson has enviable assets,” Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown said.