The FTSE 100 started the week with a spring in its step as London’s leading index neared post-pandemic highs.
The FTSE 100 was 0.34% higher at 7,229 in mid afternoon trade on Monday.
A mixture of strong corporate results and continued momentum in the FTSE 100’s miners helped lift the index.
HSBC
HSBC gained after it reported a $1.6bn pre-tax profit that beat estimates and CEO Noel Quinn said “we believe that the lows of recent quarters are behind us.”
“HSBC is a giant in its industry, and with signs of more positive economic conditions comes a brighter set of results. Pre-tax profits have been buoyed by a huge swing in expected credit losses – with a chunky charge this time last year, turning into a release that buffer this quarter. The group is so confident about the direction of travel, it’s announced a $2bn share buyback programme,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.
“A CET1 ratio well above target risks looking like a waste of uninvested equity, and capital returns are one way to deal with that. However, a lack of available investment opportunities could be a potential concern for more growth minded investors.”
Uncertainty
Despite the strength of the FTSE 100 on Monday, some analysts warned that a number of upcoming events could cause uncertainties in markets which may lead to volatility.
“The combination of a pandemic, recession and supply-side destruction on one side, and massive monetary stimulus, fiscal stimulus and changes in working and consumption patterns on the other means that no-one knows what’s coming next – not even central bankers. If they did, they would hardly still be running policies that were described as emergency measures when they were launched in the wake of the Great Financial Crisis,” says AJ Bell Investment Director Russ Mould.