An upgrade for HSBC has put the bank’s shares at the top of the FTSE 100, which is helping the index to make solid gains.
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Morgan Stanley gets keen on HSBC
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Europe left out of the rally
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US dollar keeps on falling
A 4% bounce for HSBC has put the FTSE 100 firmly ahead of its eurozone counterparts, helping it to play catch-up after yesterday’s Carney-inspired losses. The financial sector as a whole is putting in a sterling performance this morning, as US banks get moving on buybacks, but it is HSBC’s potential for increased cash return that has prompted Morgan Stanley to upgrade the stock. While bond yields are enjoying something of a resurgence of late, the ongoing fall in incomes from fixed income mean that dividends remain in high demand. The prospect of higher payouts from financial stocks could well provide yet another tailwind for the broader market rally, just as it began to look stagnant. Stock markets are looking healthier again, but the remarkable strength of the euro means that eurozone indices are left behind once again, continuing a pattern that has prevailed for most of the quarter.
A fresh 2017 low for the US dollar is doing wonders for commodity prices, and this is giving miners a lift too. The dollar’s troubles are more a reflection of the sudden shift in tone from the likes of Carney and Draghi, who, while not complete converts to the idea of tighter policy, have provided enough of a change to make the Fed’s actual policy tightening look positively pedestrian. With little US data on the calendar for the rest of the week, only opportunistic dip buyers look likely to be the salvation of the greenback.
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