World stocks mostly grind higher, but HSBC weighs
World stocks regained momentum on Tuesday, lifted by rising oil prices and strong eurozone economic data, but a massive earnings drop at banking giant HSBC kept a lid on London and Hong Kong. All three major US equity indices finished at new records for the seventh time in eight sessions, as enthusiasm for President Donald Trump's economic plan added to gains. Frankfurt and Paris also finished the day with solid gains after a closely-watched report rated January economic growth in Europe at the fastest pace in six years. The "grind higher in equity markets continues with stunning consistency," said Jasper Lawler, an analyst with London Capital Group. "Everybody knows there has to be a big shake-out sometime but the momentum is still firmly higher." But HSBC's disappointing fourth-quarter performance pushed London into negative territory as the bank's shares tumbled by more than six percent. Financials Barclays, Standard Chartered and Lloyds joined the downward trend. Without HSBC's share price fall, the FTSE would have reached new highs for this month, analysts said. - 'Millstone' HSBC - "Banks are today's index millstone," said Michael van Dulken, head of research at Accendo Markets in London. Asian markets mostly rose, with Tokyo boosted by a jump in the dollar against the yen amid intensifying talk that the Federal Reserve could lift interest rates as soon as next month. But Hong Kong, where HSBC shares also are listed, suffered from what Van Dulken called a "whopping" profit drop. The reason HSBC gave for its earnings decline sent new shivers through markets already spooked by uncertainty over political stability in Europe, Brexit and US trade policies. "We highlight the threat of populism impacting policy choices in upcoming European elections, possible protectionist measures from the new US administration impacting global trade, uncertainties facing the UK and the EU as they enter Brexit negotiations," group chairman Douglas Flint said in a statement. - Trump stirs hopes - In the US, retailers were given a boost by better-than-expected results from Wal-Mart Stores and Home Depot. Petroleum-linked shares were also strong on higher oil prices. But a big impetus for the soaring market remains Trump and expectations he will imminently unveil details of a major tax cut plan, perhaps at his February 28 State of the Union address. Jack Ablin, chief investment officer at BMO Private Bank, said the latest records reflected "continued panic buying" as money managers fear missing out on new peaks. - Key figures around 2200 GMT - New York - Dow: UP 0.6 percent at 20,743.00 (close) New York - S&P 500: UP 0.6 percent at 2,365.38 (close) New York - Nasdaq: UP 0.5 percent at 5,865.95 (close) London - FTSE 100: DOWN 0.3 percent at 7,274.83 (close) Frankfurt - Dax 30: UP 1.2 percent at 11,967.49 (close) Paris - CAC 40: UP 0.5 percent at 4,888.76 (close) EURO STOXX 50: UP 0.8 percent at 3,338.37 Tokyo - Nikkei 225: UP 0.7 percent at 19,381.44 (close) Hong Kong - Hang Seng: DOWN 0.8 percent at 23,963.63 (close) Shanghai - Composite: UP 0.4 percent at 3,253.33 (close) Euro/dollar: DOWN at $1.0535 from $1.0613 Pound/dollar: UP at $1.2477 from $1.2464 Dollar/yen: UP at 113.69 yen from 113.11 yen Oil - West Texas Intermediate: UP 66 cents per barrel at $54.06 per barrel Oil - Brent North Sea: UP 48 cents at $56.66 per barrel
