HSBC, Next and Morrisons

“The FTSE100 opened on the front foot after the US Federal Reserve held interest rates last night, pushing gold down and the dollar up. Investors are awaiting a range of services purchasing-managers' indices in the UK across Europe, plus a range of other data including UK mortgage approvals and net lending,” says AJ Bell Investment Director Russ Mould.

“HSBC topped the blue-chip board after first quarter results came in ahead of market forecasts. The group’s reported pre-tax profits were 19% down on a year ago but those figures included operating results from its Brazil business which was sold in July. The fall, though, was largely due to a change in the accounting treatment of the fair value on its own debt and adjusted figures showed a 12% rise in pre-tax profits to $5,937m. HSBC has achieved annualised run-rate savings of $4.3bn while continuing to invest in growth and has seen strong momentum in Asia. HSBC’s shares were up by more than 3.3%.

“Next’s shares fell as the group’s full-price sales slumped in the first quarter. The consumer environment is challenging, particularly in the clothing and homeware markets, as real wage growth has slowed and Next has reduced the upper end of its full-year guidance accordingly. It now sees pre-tax profit coming in at £680m-£740m compared with its prior expectation of £680m-£780m. Next’s shares were down by 5.2% in early trading.

“Morrisons was an early riser after like-for-like sales excluding fuel rose by 3.4% in the 13 weeks to the end of April. The supermarket giant’s turnaround plans with initiatives in-store, online, in wholesale and services are on track and it has maintained its full-year guidance, including net debt of less than £1bn. The group’s shares were up by over 1.5%.” 

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