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LONDON MARKET MIDDAY: FTSE 100 climbs but European peers down

London’s FTSE 100 pushed higher on Tuesday afternoon, as its winning streak looks set to continue, though blue-chip benchmarks in Frankfurt and Paris struggled as shares in carmakers went into reverse.

The FTSE 100 index was up 47.90 points, 0.6%, at 8,194.93. The FTSE 250 slipped just 2.92 points, to 20,081.87, and the AIM All-Share was up 0.85 of a point, 0.1%, at 764.18.

The Cboe UK 100 was up 0.5% at 818.36, the Cboe UK 250 added 0.2% to 17,373.57, and the Cboe Small Companies was down 0.1% at 15,696.39.

The pound was quoted at $1.2547 around midday Tuesday, down slightly from $1.2554 at the time of the London equities on Monday. The euro stood at $1.0733, rising from $1.0717. Against the yen, the dollar was trading at JP¥156.92, up from JP¥156.64.

The eurozone’s annual consumer price inflation rate was unmoved at 2.4% in April, where it had stood in March. Core inflation abated to 2.7% from 2.9%, though it came in hotter than expectations of 2.6%, potentially catching the eye of policymakers at the European Central Bank.

‘The ECB has, however, made it clear to markets its intention to begin lowering interest rates in June, and we see today’s data as unlikely to be enough to derail the Governing Council’s plans,’ Ebury analyst Matthew Ryan commented.

In European equities on Tuesday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was down 0.4%.

Share price falls for automotive firms hurt the DAX. Mercedes fell 4.4%, BMW lost 2.6% and Volkswagen dropped 2.4%. Mercedes and VW both reported declines in first-quarter profit. Jeep owner Stellantis lost 1.2% in Paris. It said revenue in the first-quarter fell.

Stocks in New York are called to open lower. The Dow Jones Industrial Average is called marginally lower, and the S&P 500 and Nasdaq Composite down 0.2%.

The Federal Open Market Committee meeting kicks off Tuesday, with a decision on Wednesday. The Fed is expected to leave rates unmoved, with focus on what Chair Jerome Powell has to say at a subsequent press conference.

AJ Bell analyst Russ Mould commented: ‘While the Fed is expected to maintain the status quo on interest rates, commentary on its current thinking on the trajectory of rates in the remainder of the year will likely have a significant impact on markets.’

In London, HSBC rose 4.6%, the best FTSE 100 performer. The London-based, Asia-focused lender said first-quarter net interest income fell 3.4% to $8.65 billion from $8.96 billion year-on-year, though came in higher than company-compiled consensus of $8.50 billion. Net operating income increased 1.5% to $20.03 billion from $19.74 billion.

Pretax profit was $12.65 billion, 1.8% lower than the prior year’s $12.89 billion, but ahead of $12.61 billion consensus. HSBC noted the figure included a $4.8 billion gain following the disposal of its Canadian banking business, which was partially offset by a $1.1 billion impairment related to the sale of its business in Argentina.

HSBC said it has approved a first interim dividend of $0.10 per share, up year-on-year from $0.09. It will also pay a special dividend of $0.21 following the sale of its Canadian banking business. In addition, it announced a new share buyback of up to $3 billion, following the conclusion of the $2 billion buyback announced with its full-year results.

HSBC said Chief Executive Noel Quinn has informed the board of his intention to retire from the bank after nearly five years leading the company, and 37 years at the firm in total. Quinn said he plans to ‘pursue a portfolio career’ going forward.

Hargreaves Lansdown surged 5.8%. It reported assets under administration spiked to a record high in its recently-ended third-quarter, and it said ‘momentum’ has continued this month.

The wealth management platform reported net new business of £1.6 billion for the three months ended March 31. It noted ‘good momentum into tax year end with increased gross inflows, net new clients and share dealing volumes’. Assets under administration rose 5.3% on-quarter to £149.7 billion, a record, from £142.2 billion.

Hargreaves Lansdown noted the net new business outcome was a ‘significant step up versus the first half of the year’.

It posted net client growth of 34,000 in the quarter, picking up speed from 23,000 a year prior. Share dealing volumes averaged 794,000 per month, rising on-year from 770,000.

Total revenue in the quarter was 6.2% higher year-on-year at £199.7 million from £188.1 million.

It added: ‘Looking ahead to the remainder of the financial year, we are pleased to see momentum continue into April as clients take advantage of the benefits of investing at the start of the tax year. We continue to make good progress against our priorities for the year - improving our client proposition, controlling our costs and increasing our execution pace so that we can capitalise on the significant growth opportunities that lie ahead and create value for all our stakeholders.’

Panmure Gordon analysts commented: ‘It has been popular among commentators to write Hargreaves Lansdown off of late, but it appears that clients disagree.

‘It would be premature to call a lasting turn, cost of living pressures are still a material feature, but this is a good update and certainly a better performance than is discounted in the share price.’

On AIM, essensys slumped 29% as the provider of software and cloud services for the flexible workspace industry posted a half-year revenue decline.

Revenue in the six months to January 31 declined 9.1% year-on-year to £11.7 million from £12.9 million. Its pretax loss, however, slimmed to £2.8 million from £7.7 million. Administrative expenses fell 34% to £9.9 million from £15.0 million.

essensys cautioned on its full-year outcome, it said: ‘Whilst recurring revenue continues to track in line with management expectations full year revenue will be below market expectations due to lower than expected non-recurring revenue as customer capex budget pressures persist.’

Brent oil was quoted at $87.49 a barrel early Tuesday afternoon, up from $87.27 at the time of the London equities close on Monday. Gold was quoted at $2,315.78 an ounce, down from $2,337.40.

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