The UK blue-chip index dipped 11 points, or 0.2%, to 5,783, with HSBC topping the leaderboard, up 6.6% at 340.4p.
The Asian-focused bank plans to move its main source of income from interest rate to fee-based business after reporting an 11% decline in third quarter revenue, which were driven lower by falling interest income.
Hargreaves Lansdown analyst Nicholas Hyett said ‘low interest rates are squeezing incomes on one side and bad loans push up the cost on the other side’. He said if the bank was successful in shifting its business model it ‘should generate attractive returns and we’d expect a large portion of those profits to come back to shareholders as dividends’.
BP also helped cheer investors this morning as the oil giant swung back into a small $86m profit in the third quarter after a record $6.7bn loss in the second as the oil price plummeted during the coronavirus crisis. The shares rose 1.5%, or 3p, to 203p.
Neil Wilson, analyst at Markets.com, said: ‘Fundamentally it’s just really tough to make money with [oil] prices at these levels – BP’s breakeven is $42 and Brent today trades at $41 with a negative outlook as demand remains depressed and global inventories build.’
Financial stocks fell to the bottom of the FTSE 100, with asset manager M&G (MNG) down 3.7%, or 6p, at 160p and wealth management group St James’s Place (SJP) 2.7% lower at 904p after inflows fell but stock market rises pushed funds under management to a record high.
UK ‘mid-cap’ companies on the FTSE 250 fell 0.6%. Plus500 (PLUS) was the heaviest faller, down 9.4%, or 153p, at £14.67 after the contracts for difference (CFD) trading platform reported a 96% third quarter revenue rise but an increase in customer churn to 43%, more than double in the same period last year.
UK markets were steadier this morning compared to yesterday and despite toughest session on Wall Street for a month but investors are still unnerved by the rising number of coronavirus cases.
Fiona Cincotta, analyst at City Index, said rising coronavirus cases continued to weigh on sentiment, ‘dampening the economic recovery outlook’.
In the UK, Nottingham and Warrington are the latest areas of England to move into the strictest tier three restrictions.
By the end of the week, 8.2m people will be restricted by a tier three lockdown as the government tries to get a handle on the spread of the virus. Last week the UK reported its highest daily number of new cases, of 23,000.