London midday: Stocks stay down as HSBC, Lloyds slump; IAG bucks trend

(Sharecast News) - London stocks were still weaker by midday on Thursday, led lower by a host of ex-dividend names and heavy falls for the likes of HSBC and Lloyds.

The FTSE 100 was down 0.4% at 9,511.95.

Richard Hunter, head of markets at Interactive Investor, said: "The FTSE 100 declined from its own record closing high at the open, weighed down by the usual Thursday raft of stocks being marked ex-dividend.

"Despite any weakness in opening exchanges, the premier index has posted an impressive gain of 16.5% in the year to date, quite apart from the additional boost across its constituents of an average 3.1% dividend yield.

"With an increasing appetite for haven destinations in evidence and with a still heavily discounted valuation to many of its global peers, the FTSE 100 for many continues to represent compelling value."

In equity markets, Barratt Redrow, Tesco, WPP, Kingfisher, Taylor Wimpey and Primary Health Properties all fell as they traded without entitlement to the dividend.

HSBC was the worst performer after it announced plans to take Hang Seng Bank private in a deal that values the lender at 290 billion Hong Kong dollars ($37bn), and said it would suspend buybacks for three quarters to preserve capital.

The bank, which owns around 63.3% of Hang Seng Bank, has offered HK$155 a share for the shares it does not already own. This is a premium of about 30% to the last closing price.

Russ Mould, investment director at AJ Bell, said: "Like a toddler who has been told they can't have another biscuit, HSBC shareholders are stamping their feet on news they won't be getting any share buybacks for the next few quarters. The bank plans instead to put its cash towards buying out minority investors in Hong Kong lender Hang Seng Bank.

"This is a key plank of HSBC's wider restructuring plan. However, given it is a tidying-up exercise it is unlikely to excite the market too much, particularly as Hang Seng has been hit by a property slump in Hong Kong."

Lloyds lost ground after saying it will need "material" additional provisions to provide redress to customers in the motor finance mis-selling scandal.

The Financial Conduct Authority ruled this week that lenders would have to pay out £11bn including costs in compensation after finding "widespread failings" in how motor finance firms disclosed commission payments and commercial ties between lenders and brokers on agreements signed between 6 April 2007 and 1 November 2024.

Lloyds, which has already put aside £1.2bn to cover possible costs, said it was still reviewing the regulator's proposals but predicted that additional provisions would be required.

Food and beverage outlet operator SSP retreated even as it said that both revenue and profits had increased in the year ended 30 September, despite a moderation in passenger number growth in the second half.

On the upside, BA and Iberia owner IAG flew to the top of the FTSE 100 after well-received quarterly results and an upbeat outlook from Delta Airlines.

Johnson Matthey gained as it said full-year underlying operating profit was set to be at the higher end of initial guidance for mid single digit growth.

Grainger rose as it hailed a "strong" full-year performance, with occupancy at 98.1%, ahead of expectations, and said it was on track to deliver 50% earnings growth from FY24 to FY29.

Volution shot higher as the designer and manufacturer of energy efficient indoor air quality solutions reported a rise in full-year profit and revenue, boosted by its acquisition of Fantech in Australasia.

Market Movers

FTSE 100 (UKX) 9,511.95 -0.39% FTSE 250 (MCX) 22,057.54 0.07% techMARK (TASX) 5,582.81 -0.03%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 413.60p 3.40% Mondi (MNDI) 872.60p 2.90% Metlen Energy & Metals (MTLN) 46.85p 2.18% Anglo American (AAL) 2,953.00p 1.83% Smurfit Westrock (DI) (SWR) 3,231.00p 1.57% Entain (ENT) 837.60p 1.36% United Utilities Group (UU.) 1,167.50p 1.21% Severn Trent (SVT) 2,640.00p 1.19% Weir Group (WEIR) 2,834.00p 1.14% GSK (GSK) 1,638.00p 1.08%

FTSE 100 - Fallers

HSBC Holdings (HSBA) 1,004.60p -5.76% Barratt Redrow (BTRW) 376.50p -3.31% WPP (WPP) 357.00p -2.88% Lloyds Banking Group (LLOY) 84.16p -2.57% Babcock International Group (BAB) 1,236.00p -2.52% The Sage Group (SGE) 1,093.50p -1.53% Burberry Group (BRBY) 1,248.50p -1.30% Prudential (PRU) 1,033.00p -1.29% JD Sports Fashion (JD.) 99.90p -1.19% BAE Systems (BA.) 2,005.00p -1.18%

FTSE 250 - Risers

Volution Group (FAN) 685.00p 5.55% Energean (ENOG) 894.50p 3.77% Diversified Energy Company (DEC) 1,063.00p 2.31% Mitchells & Butlers (MAB) 248.50p 2.26% Hays (HAS) 58.85p 1.99% Coats Group (COA) 81.40p 1.88% Spire Healthcare Group (SPI) 244.50p 1.66% Genuit Group (GEN) 368.00p 1.66% Man Group (EMG) 193.20p 1.63% Marshalls (MSLH) 175.20p 1.62%

FTSE 250 - Fallers

Close Brothers Group (CBG) 501.00p -4.39% Taylor Wimpey (TW.) 100.85p -4.23% Aston Martin Lagonda Global Holdings (AML) 64.90p -3.13% Chemring Group (CHG) 571.00p -2.73% Unite Group (UTG) 616.00p -2.30% Finsbury Growth & Income Trust (FGT) 846.00p -2.08% Syncona Limited NPV (SYNC) 98.00p -2.00% Primary Health Properties (PHP) 88.05p -1.95% Empiric Student Property (ESP) 82.50p -1.79% Patria Private Equity Trust (PPET) 575.00p -1.71%