Market Report: Barclays and HSBC report mixed fortunes

It was a tale of two banks for the blue chips yesterday as Barclays and HSBC issued updates – but one was far, far better than the other, and had dramatic results on the market.

Barclays ended up at the bottom of the index after it said its profits for the first nine months of the year had fallen by almost a fifth to £4.5bn following a rise in impairment charges. Its investment banking and asset management profits also suffered. Barclays' shares fell 17.5p, or 5.1 per cent, to 325.35p.

At the other end, HSBC did not disclose any numbers but said its third-quarter profits were up sharply on a year ago, its investment banking business was storming ahead and losses on US consumer loans had fallen for the first time in three years. Its shares rose 27.8p, or4.02 per cent, to 720p.

HSBC's chief executive Michael Geoghegan believes the "biggest jolt has now passed through the global economy". David Jones, chief market strategist at IG Index, said: "After seeing such strong gains since the March lows, the likes of Barclays and RBS seem to have lost the interest of the market in recent months. Today's figures look likely to continue steering investors towards the perceived safe pair of hands that is HSBC, if they really want exposure to banks."

The miners slammed into reversed after a strong session at the start of the week, as commodity prices failed to hold. Kazakhmys was the highest riser on Monday but was the fourth-worst yesterday as it fell 34p to 1252p.

It was overtaken by Randgold Resources, whose third-quarter profit disappointed investors. Its shares fell 202p to 4577p after it said costs had risen by 17 per cent and profits were less than expected. In response, Numis lowered its rating on Randgold's stock from "reduce" to "sell".

Investors also checked out of Intercontinental Hotels after the company, which owns the Holiday Inn and Crowne Plaza chains, said trading remained challenging and its third-quarter revenues had fallen from $496m to $401m. The board said there was considerable pressure on occupancy rates despite signs of stabilisation and it was too early to forecast a recovery. The group's shares gave up 17.5p and closed at 825p.

Also suffering from an update was the telecoms group Vodafone, whose results were in line with expectations. Some analysts believe it has tougher-than-expected competition in emerging markets such as India. Vodafone also said it would double its cost-cutting programme to £2bn by 2012, which spooked some analysts about its growth prospects. Saeed Baradar, of Société Générale, was particularly aggressive, saying Vodafone was "an ex-growth company struggling to maintain margins with unachievable cost cuts". Despite announcing a 2.4 per cent rise in operating profit to £5.9bn, Vodafone's shares plummeted early on but staged a slight recovery, closing down 2p at 135.95p.

The FTSE 100 hovered uncertainly in positive territory in the morning, but retreated to close down 4.63 points at 5,230.55. Some traders believe the index could near the 5,000 mark again, believing the rally has run out of steam.

The second-strongest riser was Imperial Tobacco, whose operating profits rose 10 per cent in the second half as smokers rushed to puff on its cheaper brands, growth continued in emerging markets and it cut costs. Imperial also said its chief executive Gareth Davis would step down next May to be replaced by chief operating officer Alison Cooper. The shares rose as the chief executive-designate issued a rallying cry, saying that after coping with the downturn, her emphasis would be "on growing sales with our strong global position". IT rose 42p to 1870p.

A note from UBS lifted Centrica as the Swiss broker added the stock to its "European key calls list". Analyst Nick Nelson said Centrica had less earnings volatility, a strong balance sheet position and "plenty of scope to yield further growth through tighter capital management and cost-cutting". UBS removed E.On from the list, saying Centrica had "better visibility". The news sent the shares up 3.8p to 245.5p.

It was a similar story of movement driven by updates on the second tier. The top riser was Morgan Sindall, the construction group, which rose 54.4p to 605p as it confirmed it would hit expectations this year, and said its £3.4bn order book would be bolstered by £900m of projects which were at the preferred bidder stage.

After a very short-lived rally by Punch Taverns last week, the pubs operator plunged to the bottom of the second tier as the market bought the bear case for the stock. The company's shares closed down 5.8p on 87.7p.

Another faller on the FTSE 250, was Babcock International. The engineering specialist's shares slumped despite lifting profits by 30 per cent in the first half. Analysts at Investec attributed the 22.5p fall in the stock, to 619.5p, to profit-taking.

The sexual health specialist Futura Medical fell 13.8 per cent to 37.25p after it announced delays to its lead product. The group was supposed to be developing a condom for Durex but is still awaiting regulatory approval.

On the plus side, software group Kewill Systems plans a £7.5m raising to strengthen its balance sheet and look at acquisitions. It rose 6.5p to 99p.

Suggested Topics
Sport
footballLIVE City face Stoke, while Warnock returns to Palace dugout
Life and Style
3D printed bump keys can access almost any lock
gadgets + echSoftware needs photo of lock and not much more
News
i100
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
PROMOTED VIDEO
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
i100
News
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
Sport
Mario Balotelli pictured in his Liverpool shirt for the first time
football
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

DevOps Engineer (Systems Administration, Linux, Shell, Bash)

£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

Data Scientist (SQL, PHP, RSPSS, CPLEX, SARS, AI) - London

£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...

Financial Technical Consultant (C++, C#, Finance, MSc, PhD)

£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone