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Shares in Asia-focused Standard Chartered (STAN) are leaking most on the UK 100 this morning after Q3 profits (pre-tax, pre-exceptionals) missed consensus. Management highlighting still elevated loan impairments and expectations for markets to remain challenging is a message investors don’t want to hear. Not when data from China shows signs of stabilisation, soothing market fears about a hard landing for the world’s #2 economy reverberating through the region.
The results and share price reaction are also dragging heavyweight peer and Asia-exposed HSBC lower along with the rest of their London-listed banking brethren (BARC, LLOY & RBS). This has taken the blue-chip index negative, offsetting earlier strength from strong results by heavyweight Royal Dutch Shell that easily made up for a miss by peer BP; itself the second worst performer and biggest negative contributor today.
Traders remain jittery given the raft of event risk in the pipeline (Fed, BoE, Election, OPEC) and equities trading so close to their highs. Today’s share price drop represents a set-back for STAN, but they remain above rising Feb support which could see bargain hunters on the prowl around 650p.
Mike van Dulken, Head of Research, 1 Nov
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