HSBC quarterly profits near-double, headwinds keep lid on Smith & Nephew growth

London open

The FTSE 100 is expected to open 14 points lower on Tuesday, having closed up 0.12% on Monday at 8,014.31.

Stocks to watch

HSBC said quarterly profits almost doubled, driven by the rise in global interest rates, and unveiled a special dividend. The Asia-focused bank reported pretax earnings of $5.2bn, up from $2.7bn and ahead of the $4.96bn company-compiled average. Annual expected credit losses rose to $3.6bn, more than forecasts of $3.2bn, due to rising inflation and China's struggling property market. Full-year profit fell to $17.5bn from $18.9bn, largely down to a $2.4bn charge on the sale of its retail banking operations in France.

Smith & Nephew reported full-year revenue of $5.22bn (£4.35bn) on Tuesday, showing a 4.7% increase on an underlying basis, but only 0.1% reported growth due to currency headwinds. The FTSE 100 medical device firm’s trading profit was $901m, with a margin of 17.3% as a result of higher inflation. Cash generated from operations was $581m, and the company completed $150m of its share buyback programme. The full-year dividend remained unchanged at 37.5 US cents per share.

Newspaper round-up

Switching between energy suppliers is expected to return later this year after a two-year pause due to lack of competition amid high bills. The energy consultancy Cornwall Insight said on Monday that easing costs later this year would present consumers with the chance to “take back some control” over their bills, as suppliers compete for customers again. – Guardian

Switching to a four day week makes companies more money while also boosting staff happiness and reducing burnout, a major study has suggested. The landmark research project run in part by the University of Cambridge has found that, on average, businesses adopting a four-day working pattern increased their revenues by more than a third. It comes amid a fierce debate about how to solve Britain's long-running productivity crisis. – Telegraph

Jaguar Land Rover is racing to hire tech workers who have been laid off across Europe as it attempts to develop a self-driving car. The company (JLR) intends to recruit 100 more engineers at new hubs in Munich, Germany; Bologna, Italy; and Madrid, Spain. Its recruitment drive follows a wave of redundancies at big tech companies following a global slowdown. The parent companies of Google and Facebook are axing 23,000 jobs between them, with many other players following suit. – Telegraph

Bosses of small companies are increasingly upbeat about their prospects, according to a survey, adding to evidence that the outlook for the British economy may not be as bad as has been feared. A poll of small and medium-sized firms commissioned by Barclays found that 41 per cent were optimistic about their outlook, the highest level since the second quarter of last year. Fifty-five per cent were expecting to increase revenues this quarter compared with a year earlier, while a third were planning to hire more staff in the next 12 months. – The Times

US close

Equity markets remained closed on Wall Street on Monday, for the Presidents’ Day federal holiday.

They had closed mixed on Friday, when the Dow Jones Industrial Average added 0.39% to 33,826.69.

At the same time, the S&P 500 lost 0.28% to 4,079.09, and the Nasdaq Composite was 0.58% weaker at 11,787.27.