HSBC dampens FTSE and prevents new record

Banking giant HSBC prevented the FTSE 100 Index from climbing towards a new record high today after its profits fell by more than expected.

Shares in the heavyweight stock slumped by 6% as a weak fourth quarter in its investment banking arm contributed to the bank’s annual profit dropping by 17% to $18.7 billion US dollars (£12.1 billion) for 2014.

The slide for such an important blue-chip stock meant the FTSE 100 Index retreated 21.6 points to 6893.5, having been in positive territory earlier in the session after Greece and its European creditors agreed a four-month extension to the country’s bail-out agreements.

Further progress depends on a list of reforms due to be submitted by the Greek finance minister Yanis Varoufakis.

The slide in the FTSE 100 dashed hopes that the top flight might beat 1999’s record close of 6930.

The pound also experienced mixed fortunes, with sterling down against the US dollar at 1.53 and 0.5% higher versus the euro at 1.35.

In terms of London shares, banking heavyweight HSBC was the focus of attention after chief executive Stuart Gulliver admitted the banking giant “disappointed” last year.

City investors agreed as shares fell 35.75p to 569.45p and Asia-facing rival Standard Chartered dropped by 41.15p to 932.35p.

Barclays avoided the sell-off and Lloyds Banking Group was up 1p to 79p after it emerged that the Government has sold another £500 million of shares in the part-nationalised lender. The rise in the share price comes with Lloyds expected to announce its first dividend in seven years later this week.

Other big risers in the FTSE 100 included British Airways owner International Airlines Group, which climbed 12p to 563p ahead of its results later this week.

And Primark owner Associated British Foods was higher after it reported more strong growth for its retail arm, with sales for the first half of the financial year set to be 16% higher at constant currency rates.

With Primark and the rest of the business continuing to trade in line with expectations, shares rose 28.5p to 3064.5p, a gain of 1%.

Outside the top flight, housebuilder Bovis Homes was higher after it posted a 69% rise in annual profits to £133.5 million, in line with expectations after an “excellent” year.

Shares were initially lower due to analyst concerns over the price of land but the stock later recovered to stand 5.5p higher at 953p.