By Connor Campbell, Financial Analyst, Spreadex
After enduring a difficult time of it last week the FTSE is looking to close out July above 7400 this Monday.
Climbing 0.7%, the UK index was certainly feeling perky. There were a few potential reasons for the FTSE’s substantial gains. That sterling has taken an early dip no doubt helped out the index, with the pound dropping 0.3% against the dollar – it is, however, still above $1.31 – and 0.1% against the euro. The oil and, especially, mining stocks were also buoyant after the bell, despite a slightly disappointing manufacturing PMI from China overnight.
Finally, and arguably most importantly, there was the 3.5% jump from HSBC (LON:HSBA) following the firm’s half year update. Pre-tax profit rose 5% to $10.24 billion, easily breezing past the $9.5 billion forecast, with adjusted revenue at $26.1 billion. Europe’s largest bank also announced a $2 billion share buyback to take place in the second half of the year, at the lower end of estimates but still enough of a sweetener to send the stock to its highest price since the financial crisis.
The eurozone indices weren’t quite as enthusiastic as the FTSE, though the DAX and CAC did still manage a 0.3% and 0.5% increase respectively. The main focus for the region this Monday is the eurozone-wide inflation reading, forecast to remain at 1.3% (the core reading’s set to stay at 1.1%). Anything higher than that could give a boost to the euro, which is currently down 0.2% against the dollar, and quickly spell the end of the DAX and CAC’s gains.
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