DailyFX European Market Wrap: Equities Rally as PMIs Point to Stronger Growth
Shares in Europe's largest bank by assets – HSBC - saw its profit before tax slump 62% to $7.1bn from the $18.9bn reported a year earlier. The bank put the drop down to a string of one-off charges, including the sale of its operations in Brazil as well as slowing economic growth in its main markets of Hong Kong and the UK.
In other news Britain’s public sector borrowing has fallen by the most since 2010. Sterling rose one-tenth of a percent versus the Dollar following the data release. Public sector net borrowing (excluding public sector banks) decreased by £13.6 billion to £49.3 billion in the current financial year-to-date (April 2016 to January 2017), compared with the same period in the previous financial year.
On the continent, European markets were given a lift in early trading by a better-than-expected composite Purchasing Managers Index for February. The number came in at 56 – the highest reading since April 2011. Which means growth in euro zone business activity is gaining, with positive numbers from both France and Germany – the two biggest economies in the block who also have political uncertainty in common too.
BHP Billiton swung back into profit for the first half of the 2017 financial year and has rewarded investors by announcing a higher-than-expected dividend. Net profit was $3.2bn dollars for the six months to December 31, compared with a loss of $5.7bn in the same period a year earlier.
Looking ahead to Wednesday, there’s Germany’s IFO Business Climate Index, the second estimate of UK GDP (DailyFX Analyst Nick Cawley will be covering the data live) and Eurozone inflation. Plus – the FOMC meeting minutes and the existing home sales for January. Lloyds, Barratt Developments, and HP will all report earnings.
--- Written by Katie Pilbeam, DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.