Monday, October 28: Bullish rhetoric from Trump as he declared China trade talks were “ahead of schedule” nudged European equities into the green, and sent the S&P 500 to a record intraday high of 3,044, and also spurred higher by hopes of a US fed funds rate cut.
HSBC(-2.27%) slipped after announcing a PBT fall of 18% to $4.8bn in the three months to September, (Q3) and warned on a challenging environment ahead. Asia, where the Group derives a significant amount of profit, posted a strong performance, but the UK, US and Europe performed poorly. Management flagged that significant changes would be on the way in Q4 and in later periods, including potential goodwill impairments and additional restructuring charges to right size the business.
Cairn Energy(-16.92%) was the largest detractor on the FTSE 250 as the UK oil & gas company announced it would abandon its 50%-owned Alom-1 well, offshore Mexico after a drilling program found it to be dry. The Group holds a 50% working interest with joint-venture partners Mexico’s Citla Energy and Italy’s ENI holding 35% and 15% respectively. On a brighter note for shareholders, a tribunal relating to the company’s Indian tax dispute expects to issue its award in the Summer of 2020. The Group maintains its high level of confidence in the merits of its claim in the arbitration and is seeking full restitution for losses exceeding g$1.4bn. The dispute arose as Cairn Energy was ordered to sell its shareholding in Vedanta Ltd, resulting in a $713.1m loss, the harm was compounded as the Indian tax authority withheld dividends to the tune of $164m.
European equities were higher at the close, with the FTSE 100 +0.09%, the CAC 40 +0.15% and the DAX 30 +0.37%.