HSBC posts jump in profits, GSK reports HIV treatment success

London open

The FTSE 100 is expected to open two points lower on Wednesday, having closed down 0.12% on Tuesday at 7,719.21.

Stocks to watch

HSBC on Wednesday posted a record jump in annual profits and announced a $2bn share buyback but missed forecasts as it was forced to take a $3bn hit from its exposure to a Chinese bank The Asia-focused lender said full-year pre-tax profit rose 78% to $30.3bn driven by high global interest rates, but below the $34.1bn average estimate of brokers compiled by the bank. However it also took a $3bn impairment on its stake in China's Bank of Communications.

GSK said on Wednesday that the interim analysis of the ‘LATITUDE’ phase three trial by its HIV specialist unit ViiV revealed that its long-acting injectable treatment Cabenuva showed superior efficacy compared to daily oral therapy in individuals facing challenges with treatment adherence. The FTSE 100 pharmaceutical giant said the Data Safety Monitoring Board suggested modifying the study to cease randomisation and offer participants receiving daily oral therapy the option to transition to long-acting injectable therapy, based on the promising results. It said the full dataset would be presented at an upcoming scientific conference.

Mining giant Rio Tinto said that commodity price movements led to a $1.5bn hit to underlying profits in 2023, though results were partly offset by a stronger US dollar and lower energy prices. Underlying EBITDA totalled $23.9bn for the 12 months to 31 December, down 9% on the year before. Average prices for copper fell by 3% over the year, and dropped 17% for aluminium, along with further declines seen in diamonds and industrial minerals; gold prices however gained 8% and for iron ore prices rose 0.5%.

Newspaper round-up

Food businesses sending products to the EU have had to fork out an extra £170m in export costs because of Brexit red tape, with the changes described as being “catastrophic” for some exporters. Data shared with the Guardian shows that in the three years since leaving the single market, exporters of foods of animal origin have had to pay the sums to secure sign-offs by vets before they can send their shipments. – Guardian

The cost of filling up a family car in the UK increased by about £2 this month as the jump in the oil price caused by the Red Sea attacks is felt at the pumps. In the three weeks to 18 February petrol increased by 3.2p to 143.4p a litre, while diesel rose by 4p to 152p, according to the RAC, which said this was “worrying” for motorists. – Guardian

Britain and Europe must work together to resist an onslaught of cheap Chinese electric vehicles (EVs), the boss of Renault has warned. Luca de Meo, chief executive of the French car maker, said the switch to greener vehicles posed the biggest challenge to the industry in 150 years, but warned companies were being over-regulated and lacked financial support. – Telegraph

A boardroom row has broken out at Klarna, with some shareholders in the credit group seeking the removal of Sir Michael Moritz as its chairman. Sequoia, the American investment group that owns 22 percent of the “buy now, pay later” lender, is calling for an extraordinary meeting to remove Moritz, who previously was a partner at Sequoia and was its nominee on the Klarna board. – The Times

Urban Logistics Reit has thrown its hat in the ring at the last minute in an attempt to hijack the takeover of a rival warehouse landlord. The owner of sheds worth £1.1 billion throughout the UK has tabled an indicative proposal to merge with Abrdn Property Income Trust, valuing the latter at about £226 million. – The Times

US close

Wall Street stocks closed lower on Tuesday as market participants returned from the Presidents' Day long weekend.

At the close, the Dow Jones Industrial Average was down 0.17% at 38,563.80, while the S&P 500 lost 0.60% to 4,975.51 and the Nasdaq Composite saw out the session 0.92% weaker at 15,630.78.

The Dow closed 64.19 points lower on Tuesday, taking a bite out of gains recorded in the previous session.

Despite Friday's gains, major indices turned in their first losing week in more than a month, driven by fears that the Federal Reserve may not look to cut interest rates at quite the pace investors had hoped to see.

On Tuesday, the yield on the benchmark ten-year Treasury note was down a little less than one basis point at 4.277%, while its two-year counterpart was a little more than two basis points softer at 4.614%.