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FTSE 100 movers: Intertek surges on EQT bid; HSBC slumps on results
(Sharecast News) - London's FTSE 100 was down 1.6% at 10,197.18 in afternoon trade on Tuesday. HSBC tumbled 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.
Lloyds and Standard Chartered also fell.
Legal & General was knocked lower by a downgrade to 'underperform' at Jefferies. "LGEN's income story is deteriorating," it said.
"Solvency surplus generation is fully consumed by dividends, capital optionality is effectively zero, and returns rely increasingly on contingent management actions.
"With solvency drifting lower and no buybacks in sight, the equity risk premium looks too low, leaving the stock exposed to a valuation reset and investor rotation to other income alternatives."
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.
FTSE 100 - Risers
Intertek Group (ITRK) 5,130.00p 6.95% BT Group (BT.A) 222.85p 2.91% BAE Systems (BA.) 2,085.00p 2.51% Spirax Group (SPX) 7,230.00p 1.94% Compass Group 11 (CPG) 28.56p 1.19% The Sage Group (SGE) 900.80p 1.14% Mondi (MNDI) 775.60p 1.02% Babcock International Group (BAB) 1,110.50p 1.00% Scottish Mortgage Inv Trust (SMT) 1,431.50p 0.74% Pearson (PSON) 1,122.50p 0.72%
FTSE 100 - Fallers
Entain (ENT) 534.60p -5.95% HSBC Holdings (HSBA) 1,279.40p -5.62% Weir Group (WEIR) 2,484.00p -4.08% Legal & General Group (LGEN) 246.55p -3.41% Lloyds Banking Group (LLOY) 95.42p -3.07% Haleon (HLN) 333.60p -2.99% Unilever (ULVR) 4,270.00p -2.98% Marks & Spencer Group (MKS) 327.20p -2.98% InterContinental Hotels Group (IHG) 140.80p -2.90% Standard Chartered (STAN) 1,822.20p -2.81%
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