UK Services Activity Grows, HSBC Pretax Profit Soars 125%

Arthi Gupta
05 Nov, 2012
New York City

The UK indexes declined tracking lower world markets and UK government gross reserves rose and services sector grew marginally in October. HSBC third quarter underlying pretax profit surged 125% to $5.04 billion.

[R]3:45 PM London – The UK indexes declined tracking lower world markets and UK government gross reserves rose and services sector grew marginally in October. HSBC third quarter underlying pretax profit surged 125% to $5.04 billion.[/R]

Stock indexes opened lower tracking losses in European and Asian markets ahead of the U.S. presidential election and growing worries of fast approaching debt cliff in the U.S.

In London, the benchmark index FTSE 100 declined 26.62 or 0.5% to 5,842.19 and the pound edged lower to $1.5975.

UK Gross Reserves Rise

The UK government gross reserves increased to $103.85 billion at the end of October from $103.15 billion in September, data from HM Treasury showed today.

Net reserves decreased by $512 million bringing the end-October total to $48.41 billion.

UK Services Activity Grows

The UK services sector grew marginally in October, survey data from Markit Economics showed today.

The headline Purchasing Managers'' Index fell to 50.6 in October from 52.2 in September. This was the slowest expansion in the current 22-month period of rising activity.

Irish Service Sector Improves

The Irish service sector expanded in October, data from a survey by Markit Economics and HSBC Bank showed.

The seasonally adjusted Business Activity Index increased to 56.1 in October, from 53.9 in September, and signaled the sharpest monthly increase in activity in five years during October.

Gainers & Losers

GlaxoSmithKline plc rose 1.4% to $43.68 after the healthcare provider announced that the U.S. Food and Drug Administration voted in support of the clinical benefit of raxibacumab for the treatment of inhalational anthrax.

HSBC Holdings plc fell 1.4% to 617.40 pence after the financial services provider said third quarter underlying pretax profit surged 125% to $5.04 billion from $2.24 billion in the year-earlier period.

The bank also confirmed that the charges stemming from the U.S. regulatory inquiry linked to money laundering are expected to “significantly” exceed $1.5 billion it has set aside.

Inmarsat Plc slumped 3.7% to 557 pence after the mobile satellite communications services provider said third quarter revenues declined 10.5% to $325.9 million from the year-ago quarter.

Lloyds Banking Group Plc fell 1% to 43.01 pence after the lender plans to sell its 60% stake in St James''s Place Wealth Management in a deal that could fetch as much as £1 billion or $1.6 billion, reports suggest.

Prudential plc declined 0.4% to 855.50 pence after its Thailand subsidiary and Thanachart Bank Public Company Limited agreed to establish an exclusive 15-year partnership to develop jointly bancassurance business in Thailand.

In addition, Prudential Thailand would acquire 100% of Thanachart Life Assurance Company Ltd. for £358 million settled in cash on completion, with a payment of £10 million payable 12 months after completion.

Senior plc dropped 1.2% to 196.40 pence after the holding company acquired 100% of the issued share capital of GAMFG Precision LLC and its parent company GAMCO Acquisition Company from its majority shareholder Mason Wells and two other minority shareholders.

The Weir Group Plc soared 5% to 1,838 pence after the engineering businesses said it is on track to deliver full year profit before tax, amortization and exceptional items in the range of £440 million to £450 million.