CFD Traders Diary
Attack of the jitters as financials drop again
3/3/2008
Not even a relatively reassuring set of figures from HSBC could stop the FTSE 100 index from a nasty early markdown, with the index flirting with a three figure drop after Friday's big falls on Wall Street.
The big worry for HSBC was the scale of its latest sub-prime writeoffs which came in at $6.6bn or 63% up against last year, a pretty shocking figure. Against this however full year profits rose 10% and just like the other bank majors it raised its dividend for the year by 11%. It said that the outlook for the rest of 2008 was uncertain, and suggested the outlook in the US could get worse before it gets better, but if this is a case of a kitchen-sink job, it could be that the worst is over for this previously well respected group.
That didn't stop RBS and Barclays adding to their 4% plus losses on Friday with another drop, but to be fair to them selling volume on the down days has not been that high, so again we could be near an excellent buying opportunity.
Elsewhere, there were plenty of other corporate results to chew on, but no surprises either way, so it seems like a two-way market until Wall Street opens, when we should expect another bout of fireworks, which is more than Ben Bernanke might have really expected or indeed wanted last week.
