European markets are mixed; HSBC drops 7.8%.
In early afternoon trading, the pan-European Stoxx 600 index struggled to find positive momentum, slipping 0.3% as most sectors traded in the red. Health care stocks saw a notable decline of 1.1%, while the automotive sector experienced a 1.5% rise.
Shares of global banking giant HSBC took a significant hit, plunging by 7.8% in early deals. The drop followed the bank's report of an 80% decrease in pre-tax profits for the final three months of 2023. This substantial decline was attributed to a $3 billion charge related to its stake in a Chinese bank.
Meanwhile, Swiss mining company Glencore faced its own share of challenges as its stock fell more than 6% during morning trade. The decline came after Glencore announced a steep drop in its annual profits and a decision to lower its dividend.
Amidst these developments in European markets, Hong Kong stocks bucked the trend, surging by more than 3%. This contrasted with mixed performances in wider Asia-Pacific markets overnight, following losses on Wall Street the previous day. Investors were particularly attentive to Japan's trade data and reports of deteriorating business sentiment among large manufacturers.
On the other side of the globe, U.S. stock futures ticked down on Tuesday night following consecutive days of losses, partly driven by a decline in Nvidia shares.
Glencore's full-year earnings suffered due to decreased volatility in the energy market, resulting in a reported profit of $17.1 billion, half of the previous year's figure, during the height of the energy crisis sparked by the Russia-Ukraine war.
In contrast to Glencore's struggles, HSBC announced a pre-tax profit of $30.3 billion for the full year of 2023, representing a substantial 78% increase compared to the previous year. However, this figure fell short of market expectations, with analysts forecasting a median profit of $34.06 billion.
Despite its positive annual performance, HSBC's Hong Kong shares dipped by more than 2%, contrasting with the 3% gains observed in the Hang Seng Index. The bank's shares have experienced modest growth of about 0.5% since the beginning of the year, following a significant 23% jump in 2023, while the Hang Seng Index declined by 14%.
As markets continue to navigate through volatility and economic uncertainties, investors remain cautious, closely monitoring corporate earnings reports and geopolitical developments for potential impacts on global markets.
