The FTSE 100 struggles for direction after HSBC and BP's results

The UK stock market struggled for direction this morning after the long bank holiday weekend. Last week, the FTSE 100 fell 0.7%, weighed down by the first estimates of US GDP, which showed that the US economy grew at a much slower pace than expected in the first quarter, with an expansion of 1.1%, while 1.9% was expected. This fueled fears of global recession and impacted demand expectations, with mining stocks underperforming, tracking weaker copper prices.

Yesterday, Wall Street ended in very small bounds, with -0.04% for the S&P500, -0.11% for the Nasdaq 100 and -0.14% for the Dow Jones. What agitated the financial sector this weekend was the end of the agony of First Republic. Embroiled in a spiral of loss of confidence and withdrawal of funds, the lender was closed by authority of the State of California, before being sold to JPMorgan Chase, the largest American bank.

On Tuesday, HSBC posted stronger-than-expected results, with quarterly profit up three times. Its shares jumped 5.5% after the bank paid its first quarterly dividend since 2019.

Meanwhile, BP Plc fell 5.3% after it decided to slow the pace of its share buybacks after profits declined from 6.2 billion dollars for the first quarter in 2022 to a mere (sarcasm alert) $5 billion in the first three months of 2023.

Things to read today:

Investors warn of First Republic aftershocks (Financial Times)

BP Slows Pace of Share Buybacks as First-Quarter Profit Dips (Bloomberg)