Business

Banking stocks dominate after Visa Europe sale

HSBC has surprised analysts by posting pre-tax profits of £3.95 billion for the three months to September – up 32 per cent compared to the same period last year. Banks dominated the markets yesterday after Visa Inc agreed to buy Visa Europe. UK high street banks will net a windfall of £1 billion from the sale PICTURE: Joe Giddens/PA
HSBC has surprised analysts by posting pre-tax profits of £3.95 billion for the three months to September – up 32 per cent compared to the same period last year. Banks dominated the markets yesterday after Visa Inc agreed to buy Visa Europe. U HSBC has surprised analysts by posting pre-tax profits of £3.95 billion for the three months to September – up 32 per cent compared to the same period last year. Banks dominated the markets yesterday after Visa Inc agreed to buy Visa Europe. UK high street banks will net a windfall of £1 billion from the sale PICTURE: Joe Giddens/PA

TOP flight stocks struggled for direction yesterday, as banks dominated the session buoyed by a windfall from the sale of credit card firm Visa Europe to its US sister business.

Visa Inc agreed to buy its Visa Europe in a deal worth up to €21.2 billion (£15.1bn), that will also see UK high street banks net around £1bn from the sale as members of the European business.

The FTSE 100 Index was 0.7 points up at 6361.8, as UK banks cheered traders and surged up the main market leaderboard. The market had been in negative territory for most of the session.

Germany's Dax was just under one per cent up, while France's Cac 40 was up 0.6 per cent.

The pound was flat against the US dollar at 1.54, despite surprise PMI UK factory data which showed manufacturing jumped a 16-month high of 55.5 in October. Sterling was also little changed against the euro at 1.40.

The London market was weighed by weak Chinese factory output which remained in decline in October, sending heavyweight miners into the red.

China's Caixin survey of factory production rose to 48.3 last month from 47.2 in September, but this is still below a reading of 50 which indicates growth.

This data comes on top of a range of poor economic figures from China this year, which culminated in gross domestic product growth in the last quarter coming in at 6.9 per cent, a six-year low.

Miners Anglo American fell 2.3p to 544.3p, BHP Billiton was 14.5p lower to 1026p and Rio Tinto slipped 37p to 2321.5p.

Banking giant HSBC surprised analysts by posting pre-tax profits up 32 per cent to US$6.1bn (£3.95bn) for the three months to September.

The figure for the third quarter beat forecasts of US$5.2bn (£3.4bn).

The bank said it was aided by ongoing cost-cutting plans as well as lower outlays for regulatory fines. HSBC said these regulatory outlays were US$1.4bn(£910 million) lower than the third quarter of 2014.

However, shares fell almost one per cent, or 4.1p to 503.5p, as the lender remains exposed to a number of slower growing markets such as Turkey and Brazil.

By contrast other UK banks stocks rose on the back of the sale of Visa Europe.

Barclays lifted 4.1p to 236.1p, Lloyds Banking Group climbed 1.3p to 75p and Royal Bank of Scotland was up 5.5p to 323.1p.

Irish-listed airline Ryanair said its first half profits soared 37 per cent to €1.08bn (£770m) after a "very rare" series of favourable events.

The budget airline saw passenger numbers increase 13 per cent to 58 million in the six months to the end of September, carrying more than 10 million passengers in July alone. Its shares fell in Dublin as investors took profits.

In London, rival easyJet fell more than 2 per cent, or 37p to 1713p, after a downgrade from HSBC, with the broker citing concerns about growing sales in a competitive winter market.

The biggest risers in the FTSE 100 Index were Glencore up 3.1p at 115.6p, Ashtead Group up 22p at 1022p, Travis Perkins up 38p at 1954p, GKN 5.1p at 292.3p.

The biggest fallers in the FTSE 100 Index were Hika Pharmaceuticals down 112p at 2052p, Compass Group down 36p at 1083p, easyJet down 37p at 1713p and Whitbread down 87p at 4879p.