HSBC reports weaker-than-expected H1 profits, Taylor Wimpey lowers FY guidance

(Sharecast News) - LONDON PRE-OPEN

The FTSE 100 was expected to open just 1.8 points higher ahead of the bell on Wednesday after wrapping up the previous session 0.60% firmer at 9,136.32. STOCKS TO WATCH

HSBC reported lower-than-expected H1 profits on Wednesday as it took a large hit from its stake in China's Bank of Communications. Pre-tax profits fell by $5.7bn to $15.8bn, with the BoC charge coming in at $2.1bn. Q2 earnings were down 29% year-on-year to $6.3bn.

Enterprise software group Sage said on Wednesday that total revenues had grown in Q3 and reiterated its FY guidance despite ongoing macroeconomic uncertainty. Sage said Q3 revenues were up 9% at £1.86bn, with North American revenue up 11% at £846m, while UKIA and European revenues grew 9% to £539m and 6% to £477m, respectively.

Housebuilder Taylor Wimpey cut FY profit guidance by £20m due to a one-off charge, but said it was on track to meet its completions guidance by the end of the year after a "good underlying performance" in H1. Group operating profits were now expected to come in at £424m for the year, down from April's guidance of £444m, due to charges relating to principal contractor remediation works on a historical site.

NEWSPAPER ROUND-UP

A river charity is taking legal action against the environment secretary, Steve Reed, accusing him of an unlawful failure to publish his policy on taking failing water companies into temporary nationalisation. Lawyers for River Action argue that Thames Water has breached its duties and violated its licence conditions seriously and repeatedly, making it the clearest possible case for special administration. - Guardian

The European pharmaceutical industry has condemned the US move to put 15% tariffs on medicines imported from the EU, calling the taxes a "blunt instrument" that would harm patients on both sides of the Atlantic. They were responding to a White House text of the deal that inferred the 15% baseline rate on imports from the EU would also apply to drugs if the agreement is implemented on the US side on Friday as expected. - Guardian

British business activity is expected to shrink at its fastest pace since the depths of the pandemic in 2020 amid a "wave of pessimism" since Labour took power. Economists warned the "negative sentiment" had no end in sight, with activity across "all parts" of the British economy expected to keep shrinking over the next three months, according to the Confederation of British Industry. Its latest barometer of private sector output showed businesses were still reeling from the impact of Rachel Reeves's autumn tax raid, with consumer-facing sectors hit hardest by the £25bn increase in employers' National Insurance. - Telegraph

Apple is expected to launch its first foldable iPhone next year in a radical move likely to deliver a $65bn sales windfall for the tech giant. On Tuesday, analysts at Wall Street bank JPMorgan said the long awaited flip phone would form part of the new iPhone 18 lineup due in September 2026 and cost $1,999. The book-style device is likely be similar to the Galaxy Z Fold series, and will see Apple join the likes of Samsung which has been selling foldable smartphones since 2019. - Telegraph

Robey Warshaw, the boutique London-based advisory firm that counts former chancellor George Osborne among its five partners, has been bought by the US investment bank Evercore for £146 million in a cash and share deal. It is unclear how the proceeds will be divided among the five partners and the dozen other staff employed in its Mayfair headquarters. - The Times

US CLOSE

Wall Street stocks closed lower on Tuesday as traders turned their attention to a flurry of corporate earnings.

At the close, the Dow Jones Industrial Average was down 0.46% at 44,632.99, while the S&P 500 lost 0.30% to 6,370.86 and the Nasdaq Composite saw out the session 0.38% softer at 21,098.29.

Reporting by Iain Gilbert at Sharecast.com